Local and international investors offered, on Monday, to invest €705.3m in the Euro-denominated treasury bills (T-bill) bid put forward by the Central Bank of Egypt (CBE).
The CBE launched the €600m bid for T-bills with a 364-day maturation period which is due on 17 August 2021. The bid’s proceeds will be used to pay the value of a previous bid submitted by the CBE on 20 August 2019, amounting to €610m.
According to the CBE, it has received 35 offers to invest in this bid from local and foreign financial institutions. Of this number, a total of 30 have been accepted at a value of €605.3m.
The interest rate accepted by the CBE in this bid was 1.41% as the lowest price, 1.45% as the highest price, and 1.443% as an average.
Some institutions requested a return of 1.9%, which was rejected by the CBE.
The CBE started offering Euro-denominated T-bills on 28 August 2012, with the first return granted by the Ministry of Finance on those bills standing at 3.25%.
It has allowed Eurobond subscriptions for each of the local banks and foreign institutions, with a minimum subscription of €100,000 and its multiples.
Banks subscribing to the Euro-denominated T-bills can do so in the same manner as local currency T-bill issuances. Each bank submits its bid to the CBE, explaining the amount to be subscribed to the T-bills and the interest rate that it requests.
Banks operating in the local market rely heavily on these bills to invest their liquidity in Euros in a container guaranteed by the government, and at a suitable return. Banks do so on the back of few other liquidity investment options, except for rare joint loans that are offered between separate periods, or investment in the global financial markets.