The Central Bank of Egypt (CBE) will hold a Treasury bill (T-Bill) auction denominated in US dollars on Monday, offering $800m in new debt. The proceeds from this auction will be used to settle the maturity of a prior T-Bill issue from January 2, 2024, from which the CBE withdrew $850m.
In a similar auction on December 2, 2024, the CBE received 22 bids totaling $1.145bn to cover an offer of $900m for a one-year term. According to data published on the CBE’s website, the bank accepted 16 bids worth $980.5m, with an interest rate of 4.5%. This rate was slightly higher than the interest rates from the previous similar auction held on November 11, where rates ranged from 4.488% to 4.5%, with an average of 4.498%.
Some investors had requested yields as high as 5.4% in the December auction, though these bids were declined by the CBE.
Both local banks and foreign institutions are eligible to participate in these US dollar-denominated T-Bill auctions, with a minimum subscription of $100,000 or its multiples. Investors submit their bids through “primary dealer” banks, specifying the amount they wish to subscribe to and the interest rate they are seeking. The CBE then reviews these submissions and accepts those it deems appropriate.
The yield on these dollar-denominated T-Bills is influenced by global dollar interest rates, alternative investment opportunities available to local and foreign financial institutions, and Egypt’s credit rating.
