CAIRO: The median overnight interbank rate on the pound fell on Sunday to 8.35 percent from Thursday s 8.397 percent as banks shunned the market in favor of high-yielding central bank instruments, traders said. Today I noticed there are no auctions to cause a drop in liquidity. But the impact of last week s auctions is still being felt, and also there are upcoming auctions one dealer said. Other dealers said the market was slightly short. The central bank was due to auction 182-day treasury bills worth LE 1 billion ($174 million) on Monday, but no auctions were scheduled for Sunday. Dealers said they were also expecting a large auction of 7-day certificates of deposit later in the week. Last week, the central bank held auctions for LE 4 billion in 56-day certificates, LE 2.8 billion in 126-day certificates, and LE 9 billion in 7-day certificates. Three out of 10 banks contacted by Reuters had dealt overnight money at rates of between 8.20 and 8.50 percent, compared with rates of 8.3 and 8.65 percent on Thursday. Banks often prefer investing in higher-yielding central bank instruments over the interbank market, where the yields are typically lower. The central bank effectively controls the range of overnight rates by offering 8 percent on overnight deposits and lending at 10 percent. By 10:00 GMT, the pound had strengthened to LE 5.7423 to the dollar, compared with Thursday s closing weighted average of LE 5.7430. Reuters
Interbank rate drops to 8.35 percent
