500 billion Egyptian pounds: increase in domestic debt since the coup

A report by the Central Bank said the total external and internal debt has risen to 1,708 trillion Egyptian pounds, with nearly 200 billion Egyptian pounds in annual interest rates.

The net balance of domestic debt owed ​​by the government was 1.445 trillion Egyptian pounds by the end of March, an increase of 184 billion Egyptian pounds during the period from July-March of the fiscal year 2013/2014.

The report added that the volume of domestic liquidity rose at the end of March to reach 1.438 trillion Egyptian pounds, an increase of 142.3 billion Egyptian pounds, up 11 per cent during the period July-March of the fiscal year 2013/2014.

The report pointed out that the increase in money supply came as a result of the high currency in circulation outside the banking system increased by 19.5 billion Egyptian pounds, and the decline in deposits in local currency increased by 29.6 billion Egyptian pounds. The Egyptian pounds also fell against the dollar over the same period.

The report concluded that the National Investment Bank’s debts increased by about 2.1 billion Egyptian pounds and reached about 205.1 billion Egyptian pounds.

The level of domestic debt reached 1.2 trillion Egyptian pounds President Mohamed Morsi’s rule, which means in the past year it increased by less than 200 billion pounds, while in the first 10 months of the coup it increased by 500 billion Egyptian pounds.

This comes in spite of grants and assistance provided by the Gulf States which exceeded $20 billion so far with expectations of more support for the coup leader Abdel Fatah Al-Sisi.

The high domestic debt means resorting to the government to borrow from local banks and direct government lending to banks means their reluctance to support projects and investments or even investments.