Several international and local financial institutions have offered to invest $934.1m in the Egyptian USD-denominated treasury bills (T-bills), floated by the Central Bank of Egypt (CBE) on Sunday.
The CBE has offered the tender on behalf of the ministry of finance, worth $750m.
The CBE received 30 bids for investment by local and international banks, as well as financial institutions, worth of $934.1m, and accepted 25 offers worth $854.1m.
The interest rate obtained by international and local financial institutions, against their investment in these bills was up to 3.8%, and a minimum of 3.797%, averaging 3.75%, against 3.75%, 3.73%, and 3.747% respectively in the last similar tender, held on 11 December 2018
This tender’s proceeds are to cover a previous tender, floated by the CBE on 9 January 2018, worth $944.5m.
In 2018, the CBE offered six USD-denominated T-bill tenders and obtained $5.926bn.
Furthermore, 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 US dollar 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 US dollars in a government-guaranteed pot with an adequate return, as they have with no other investment available for that liquidity, except for rare syndicated loans offered on lengthy periods, as well as investing in global financial markets, with a low return and high risks.