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$1.208bn offered for investment in treasury bills - Daily News Egypt

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$1.208bn offered for investment in treasury bills

Return on bills increased by up to compared to last CBE auction last January


 

Local and international banks offered to invest $1.208bn in the treasury bills offered by the Central Bank of Egypt (CBE) for auction in dollars last week on behalf of the Ministry of Finance.

Of this liquidity, CBE accepted $1.098 with an interest rate ranging between 3.35% and 3.59% and an average interest rate of 3.58%.

The returns from this auction increased by between 14 and 34 percentile points compared to the previous interest rate CBE granted for the auction last January, which ranged between 3.22% and 3.25%, with an average interest rate of 3.248%.

The liquidity from this auction will be directed to paying off the value of a similar auction issued on 17 February 2015 for $1.117bn, according to CBE.

CBE issued last week’s auction with a value of $1bn and a maturity period of one year to mature on 14 February 2017.

The interest rate on dollar bills in the local market is decided in accordance with a number of factors, most prominently the volume of dollar liquidity in the market, the alternative investment opportunities provided for local and foreign financial institutions that invest in these bills, and the country’s credit rating.

CBE started to offer the treasury bills on 30 November 2011. The average interest rate on these bills in the first auction was 3.87%. CBE allows local banks and foreign institutions to subscribe for dollar bills with a minimum of $100,000 and its multiples.

Banks operating in the local market heavily rely on these bills to invest their dollar liquidity due to its low risk and relatively strong interest rates.

Banks resort to these bills in light of the lack of other available channels for this liquidity, with the exception of a small number of syndicated loans that are proposed infrequently, or investing in the international capital market, which has high risks and low returns.

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https://www.dailynewsegypt.com/2016/02/20/1-208bn-offered-for-investment-in-treasury-bills/
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