Egypt is raising the limit of the maximum amount of dollar bonds the country can issue on international markets by $2bn.

The ceiling of international dollar issuances to fixed income investors is currently capped at $5bn, according to a statement by Egyptian cabinet.

Egypt’s Ministry of Finance is looking to raise additional funds in the face of a rise in interest rates in the domestic debt market and increasing the balance of cash reserves through the US dollar issuances to the country’s central bank, the statement said.

The country has been seeking to diversify its funding options and has mainly relied on loans and foreign grants, especially, from its oil-rich allies Saudi Arabia, The UAE and Kuwait in the GCC. However, the country still suffers from dollar shortage which has affected its ability to import goods.

The government now plans to issue a $1bn sukuk by the end of the current financial year, Ministry for Public Treasury said in a statement in second week of April.

“As part of the financial year 2017/2018 budget, the government seeks to issue a $1bn sukuk after passing the Islamic bond issuance law,” said the statement.

Cairo launched a triple-tranche bond to raise $4bn earlier in 2017. This bond was twice the size of the funding target given when Cairo started investor meetings in mid-January.

The senior unsecured five-, 10- and 30-year bonds were issued under the Egypt’s global medium-term note programme. Egypt paid investors 6.125 per cent for $1.75bn note maturing on 31 January 2022. The $1bn 10-year tranche offered 7.5 per cent, while the 30-year $1.25bn issue offered 8.5 per cent interest.

The Egyptian central bank in November also broke away its dollar peg and floated Egyptian pound, which it hopes will alleviate the currency crisis it has been facing. The country has also agreed a $12bn loan programme from the International Monetary Fund (IMF) to support plans for sweeping economic reforms.