Local and foreign financial institutions offered to invest $1.213bn in the treasury bills tender offered by the Central Bank of Egypt (CBE) on Monday.
The CBE, on behalf of the Ministry of Finance, has offered to issue US dollar-denominated treasury bills (USD T-Bills) worth $1.075bn.
According to sources, the CBE accepted $1.075bn of the offered investments.
The highest interest on investments in this tender decreased to 3.30%, while the lowest recorded 3.25%, with an average of 3.295%, compared to 3.5%, 3.47%, and 3.495% respectively in the last tenders launched by the CBE in January.
Investors demanded an interest rate ranging between 3.25-3.9%, but the CBE accepted only the offers with interest rates of 3.25-3.3%.
The proceeds of this tender will cover the value of a previous tender put forward on 14 February 2017, worth $1.0929bn.
The CBE allows local banks and foreign institutions to subscribe to USD T-bills with a minimum of $100,000 and its multiples.
The interest rate on USD T-bills is decided in accordance with a number of factors, most prominently the volume of US dollar liquidity in the market, as well as alternative investment opportunities available for local and foreign financial institutions that invest in these bills, and the country’s credit rating.
Banks operating in the local market rely on these bills to invest their liquidity in a government-guaranteed portfolio 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.