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CBE offers treasury bills worth $7850m - Daily News Egypt

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CBE offers treasury bills worth $7850m

Tender proceeds to cover previous tender on 10 January 2017 worth $888.8m


On Monday, the Central Bank of Egypt (CBE), on behalf of the Ministry of Finance, offered to issue USD-denominated treasury bills (USD T-Bills) worth $850m.

The proceeds of this tender are to cover the value of a previous tender put forward in 10 January 2017 worth $888.8m.

CBE allows local banks and foreign institutions to subscribe for US dollar bills with a minimum of $100,000 and its multiples.

CBE had offered a previous tender on 10 December 2017 worth $1bn.

Local banks and foreign financial institutions offered to invest $1.2989bn in this tender, of which CBE accepted $1.1489bn.

The highest interest on investment in this tender amounted to 3.5%, while the lowest recorded 3.47%, with an average of 3.495%.

The interest rate on the US dollar T-bills is decided in accordance with a number of factors, most prominently the volume of the US dollar liquidity in the market, alternative investment opportunities available for local and foreign financial institutions that invest in these bills, and the country’s credit rating.

The CBE had put forward five USD T-Bills in 2017, the first offered on 10 January worth $888.8m, on 14 February worth $1.0929bn, on 9 May worth $1.21bn, on 13 June worth $713.1m, and on 10 December worth $1.1489bn.

The lowest interest rate granted by CBE spanning the five auctions ranged between 3.42 and 3.65%, with a high of 3.489-3.7% and average of 3.488 – 3.7%.

Banks operating in the local market rely on these bills to invest their liquidity in CBE’s USD T-Bills safely with the government, with an appropriate yield, in light of the lack of other investments available for such liquidity. Exceptions include rare syndicated loans, or investment in global capital markets, with a low yield and many risks.

It is noteworthy that CBE started offering these bills on 30 November 2011, with an average of 3.87%.

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https://dailyfeed.dailynewsegypt.com/2018/01/08/cbe-offers-treasury-bills-worth-7850m/
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