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CBE offers treasury bills worth $1.1bn - Daily News Egypt

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CBE offers treasury bills worth $1.1bn

Proceeds to cover previous tender on 9 May 2017 worth $1.21bn


On Monday, the Central Bank of Egypt (CBE), on behalf of the Ministry of Finance, offered US dollar-denominated treasury bills (T-Bills) worth $1.1bn.

According to a statement received by banks operating in the local market, the bills will mature in 364 days, due to be paid on 7 May 2019.

The proceeds from the tender are to cover the value of a previous tender put forward on 9 May 2017 worth $1.2105bn, which is due on Tuesday 8 May 2018.

The CBE is allowing a minimum subscription to the bills, by local banks and foreign institutions, of $100,000.

The central bank offered a tender on 12 February 2018 worth $1.075bn.

Local banks and foreign financial institutions offered to invest $1.2134bn in that tender, of which the CBE accepted $1.075bn.

The highest interest on investment in the tender amounted to 3.3%, while the lowest recorded 3.25%, with an average of 3.295%.

It is noteworthy that CBE started offering these bills on 30 November 2011. The CBE allowed local banks and foreign institutions to subscribe to US dollar-denominated bills at a minimum of $100,000 and its multiples.

The interest rate on the T-bills is decided in accordance with a number of factors, most prominently the volume of 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.

Banks operating in the local market rely on such bills to safely invest their dollar liquidity, at an appropriate yield, via a government-guaranteed avenue, in light of a lack of other investments for such liquidity. Other options include rare syndicated loans, or investment in global capital markets, which have low yield and many risks.

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