Several international and local financial institutions have offered to invest $1.2333bn in the Egyptian USD-denominated treasury bills (T-bills), floated by the Central Bank of Egypt (CBE) on Monday.
The CBE has offered the tender on behalf of the ministry of finance, worth $1bn.
The CBE received bids for investment by local and international banks, as well as financial institutions, worth of $1.2333bn, and accepted $1.1033bn.
The interest rate obtained by the international and local financial institutions, against their investment in these bills was up to 3.75%, and a minimum of 3.73%, averaging 3.747%, against 3.7%, 3.68%, and 3.697% in the last similar tender, held on 19 November 2018.
This tender’s proceeds are to cover a previous tender, floated by the CBE on 12 December 2017, worth of $1.148bn.
The CBE allows banks to buy Egyptian USD-denominated T-bills, to both local banks and foreign institutions, with a minimum subscription of $100,000, and its multiples.
The interest rate on these bills is set based on a number of indicators, such as the USD’s liquidity in the market, the alternative investments available for banks, and the country’s credit rating.
Banks operating in the domestic market rely heavily on these bonds to invest their liquidity in the USD, in a government-guaranteed pot with an adequate return, as there are no other investment available for that liquidity, except rare syndicated loans offered on lengthy periods, and investing in global financial markets, with a low return and high risk.