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Local, foreign financial institutions offer to invest $887.7m in Egyptian T-Bills - Daily News Egypt

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Local, foreign financial institutions offer to invest $887.7m in Egyptian T-Bills

Highest rate of interest on investment at 3.9%, lowest at 3.28%, averaging 3.392%

Local and foreign financial institutions offered to invest $887.7m in the US dollar-denominated treasury bills issued by the Central Bank of Egypt (CBE) on Monday.

On behalf of the Ministry of Finance, the CBE floated US dollar T-Bills worth $713m.

The CBE accepted $715m of the total bids, according to data obtained by Daily News Egypt.

Interest rates on these bills increased to a maximum of 3.9%, while the lowest was at 3.28%, averaging 3.392%. This is up from a highest rate of interest on investment in a previous auction, on 7 May 2018, of 3.3%, while the lowest was at $3.28%, averaging 2.29%.

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

According to the prospectus announced by the CBE, the bills will be due on 11 June 2019.

The tender’s proceeds are to cover the value of a previous tender worth $715m, put forward on 13 June 2017, due on 12 June 2018.

Since the beginning of this year, the CBE has offered four US dollar-denominated auctions to obtain $4bn. That includes $944.5m on 9 January 2018, due on 8 January 2019; $1.075bn on 13 February 2018, due on 12 February 2019; $1.1bn on 7 May 2018, due on 7 May 2019; and finally, $887.7m was offered on Monday.

The CBE allows local banks and foreign institutions to subscribe to the T-Bills with a minimum of $100,000 and its multiples.

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