Egypt has successfully sold EGP 904m worth of both three- and seven-year treasury bonds on Monday, the Central Bank of Egypt (CBE) announced on Monday.
The auction came after Egypt cancelled a scheduled auction of five and 10-year treasury bonds (T-bonds) last Monday, for a fourth consecutive week.
The three-year bonds carried an average yield of 18.432% while the seven-year bonds carried an average yield of 18.431%, bank data showed.
The CBE sold EGP 750m pounds worth of three-year bonds, as well as EGP 153m worth of seven-year bonds, well under the EGP 500m it was targeting.
Earlier in September, the CBE called off the auction of three and seven-year treasury bonds worth EGP 3.5bn, in addition to other two previous T-bond auctions, worth EGP 3.5bn each, as a result to the high yields demanded by bankers and investors.
At the time, Egypt’s Ministry of Finance announced that demanded return rates for the bonds exceeded the rates deemed acceptable by the ministry, and that they were affected by risks associated with emerging markets.
Demand for T-bonds in local currency has declined, and yields have risen since the currency crises in Argentina and Turkey scared foreign investors away from emerging markets.
Last Wednesday, Finance Minister Mohamed Moeit said that Egypt’s economy has been able to deal with the emerging market crisis and its consequences.
Egypt aims to reach an average interest rate on government debt instruments in the FY 2018-19 budget of about 14.7% down from 18.5% in FY 2017-18.
Egypt has a funding gap of EGP 714.64bn in the 2018-19 budget, EGP 511.21bn of which are to be provided from domestic debt instrument, and the remaining amount to be provided through foreign financing from the issuance of bonds and the International Monetary Fund loan.
