Deal to make EGP-denominated debt “Eurocleared” close to finalized, Finance Minister

EGP-denominated debt could become “Eurocleared” before the end of 2023, Finance Minister, Mohamed Maait, told local media yesterday.

The Ministry of Finance is finalizing the details to make locally-issued EGP-denominated debt cleared by Europe's biggest settlement house for securities, Euroclear, Maait explained.

Egypt has been working towards meeting clearinghouse Euroclear’s conditions since signing an agreement in 2019, with expectations that it would be completed by the second half of 2022 after delays pushed It from the fourth quarter of 2021.

By having EGP-denominated debt cleared in Europe, foreign investors will have easier access to buying local debt. Currently, foreign investors can only access the market through a small number of local banks.

In order to meet the clearing house’s requirements, Egypt has set up a central securities depository in addition to a number of technical, logistical, and administrative terms.

The Egyptian Central Securities Depository (ECSD) will begin clearing treasury bills from the Central Bank of Egypt (CBE) by August, the finance minister explained. The ECSD is majority-owned by the CBE with 70 percent of its shares, with the Finance Ministry holding 30 percent.