Egypt will offer $1 billion in one- year dollar-denominated treasury bills today as the nation seeks to cut borrowing costs after revising its budget deficit target and asking the International Monetary Fund for a loan. The Finance Ministry raised $2.53 billion in two auctions of the notes in the last two months, paying an average yield of about 3.9 percent. That compares with 15.555 percent the country paid to sell one-year local-currency notes last week. The dollar notes are exempt from a 2 percent tax paid by holders of pound- denominated treasuries. The budget deficit is targeted to reach 144 billion Egyptian pounds ($23.8 billion), or 8.7 percent of gross domestic product, in the year that ends in June, Fayza Aboulnaga, minister of planning and international cooperation, said yesterday. The deficit target has been revised four times. Egypt formally asked the IMF for a $3.2 billion loan to support an 18-month economic-reform plan that it’s seeking to have a proposal for in the next few weeks, Aboulnaga said. The IMF won’t set lending conditions and will measure progress according to government goals, Masood Ahmed, the agency’s director for the Middle East and Central Asia said. In addition, the central bank will offer 14 billion pounds in seven-day repurchase agreements today, allowing government security holders to sell them back to the regulator to access funds at a rate of 9.75 percent. Egypt started the facility last March to ease pressure on bank funds that grew increasingly committed to government securities as foreign investors exited the market amid political unrest. The yield on Egypt’s 5.75 percent dollar bonds due April 2020 fell six basis points, or 0.06 of a percentage point, to 8.22 percent, the lowest level in almost two weeks, at 12:30 p.m. in Cairo. The pound was little changed at 6.0403 a dollar. To contact the reporter on this story: Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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