International and local financial institutions have offered to invest $1.913bn in the Egyptian Treasury Bills (T-Bills) tender launched by the Central Bank of Egypt (CBE) on Monday.
The CBE has offered the tender on behalf of the ministry of finance, worth $1.675bn.
The CBE received 32 bids for investment by local and international banks and financial institutions worth $1.913bn. The CBE accepted 26 offers worth only $1.703bn.
The interest rate obtained by international and local financial institutions against their investment increased to 3.7% as a highest price, 3.68% as a lowest price, and 3.697% as an average, compared to 3.3%, 3.28%, and 3.297% on the last similar tender launched by the CBE in June 2018. The CBE refused other offers in which the price of the return reached 4.4%.
The proceeds of this tender are allocated to paying the value of a previous tender launched by the CBE in November 2017, worth $1.7283bn.
The CBE allows local banks and foreign institutions to offer in these T-bills a minimum offering of $100m and its multiples.
The return of these dollar T-bills are determined based on several indicators, most importantly, the volume of dollar liquidity in the market, the chances for alternative investments available before banks, local and foreign financial institutions, as well as the country’s credit rating.
Banks operating in the domestic market rely heavily on these bills to invest their liquidity in dollars in a government-guaranteed pot with an adequate return, with no other investment available for that liquidity, except of rare syndicated loans offered on lengthy periods and investing in global financial markets, with a low return and high risk.
