The paper demonstrates that domestic debt in Egypt has replaced foreign debt as a major issue for macroeconomic managem ent and socioeconomic progress. It discusses the background on domestic debt issuance in Egypt, its size and structure. Domestic debt indicators are also examined. Government policy regarding domestic debt is assessed. The paper summarizes the status of po verty and prospects of MDG achievement. Based on estimates of resources needed to achieve the MDGs in Egypt by 2015, the paper examines domestic debt sustainability. Special attention is given to the implications of the impossible trinity for macroeconomic and debt management.