The Central Bank of Egypt (CBE) will offer €600m worth treasury bills (T-bills) denominated in euros on Monday.
This bid will be for one year, as its value is due on 16 August 2022. Its proceeds are directed to pay the value of a previous tender, which was launched on 18 August 2020, with a value of €605.3m.
CBE received 43 offers from local and foreign investors worth €888.3m to cover the last similar bid that was launched on 9 November 2020.
CBE put forward the previous tender with a value of €690m for a period of 364 days, due on 9 November 2021. Its proceeds were used to pay the value of a previous tender on 12 November 2019 with a value of €695m.
The Bank accepted 37 of those offers, worth €698.3m with interest ranging between 1.35% as the lowest price, 1.4% as the highest price, and 1.396 as the average.
Some institutions requested a return of €2.10%, which was rejected by CBE.
It is noteworthy that the Central Bank of Egypt had started offering treasury bills in euros on 28 August 2012, and the first return granted by the Ministry of Finance on those bills amounted to 3.25%.
CBE allows subscription in euro-denominated T-bills for both local banks and foreign institutions, with a minimum subscription of €100,000 and its multiples.
Banks subscribe to euro bills in the same manner as in local currency bills, where each bank submits its bid to CBE, indicating the amount to be subscribed to in the bills and the interest rate it requests. Bids are collected at CBE for study and acceptance of the appropriate ones.
Banks operating in the local market rely a lot on these bills to invest their liquidity in euros in a container guaranteed by the government, with an appropriate return, in the absence of other investment aspects for this liquidity, except for the rare joint loans that are offered between separate periods, or investment in the global money markets.