International, local financial institutions offer to invest €850.1m in Egyptian T-bills

Hossam Mounir
2 Min Read

International and local financial institutions have offered to invest €850.1m in the Egyptian euro-denominated Treasury Bills (T-Bills) floated by the Central Bank of Egypt (CBE) on Monday.

The CBE has offered the tender on behalf of the ministry of finance, worth €675m for one year, to be due in 12 November 2019.

The CBE received 23 bids for investment by local and international banks and financial institutions worth €850.1m.

The CBE accepted 17 offers worth only €695.1m.

The interest rate obtained by international and local financial institutions against their investment in these permits ranged between 1.725% and 1.75%, compared to 1.58% and 1.598% on the last similar tender issued by the CBE in 16 August 2018.

Some institutions requested a return of 2.5% to invest, which was turned down by the CBE.

The CBE started issuing euro-denominated T-bills in 28 August 2018. The first interest to be offered on these bonds at the time was 3.25%.

The CBE allows banks to buy Egyptian euro-denominated T-bills to both local banks and foreign institutions with a minimum subscription of €100,000 and its multiples.

Banks subscribe to euro-denominated bills in the same way they subscribe in local currency T-bills.

Each bank makes its offer to the CBE, including the interest rate is seeks and the amount at aims to buy, and the CBE then reviews the proposals and accepts what it deems suitable.

Banks operating in the domestic market rely heavily on these bills to invest their liquidity in euros 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.

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