Egypt’s plan to raise 4 billion ($683 million) Egyptian pounds this week at debt auctions was disrupted after protests rocked the North African country, forcing the government to close banks and the stock market.
The government sold 2.5 billion pounds of 182-day bills in an auction on Jan. 27 as yields jumped 40 basis points, or 0.4 percentage point, from the previous sale to a one-year high of 10.6 percent, according to data compiled by Bloomberg. The Arab world’s third-largest economy delayed two debt sales scheduled for yesterday.
Reduced demand for Egyptian debt may harm the government’s ability to meet its target of cutting the budget deficit to 3 percent of gross domestic product by 2015. The gap widened to 8.1 percent in the fiscal year that ended in June from 6.9 percent in the previous 12 months. The yield on the government’s $1 billion of bonds due in April 2020 rose 27 basis points Jan. 28 to a record 6.6 percent, data compiled by Bloomberg show.
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