CBE receives 33 offers worth $1.298bn to cover US dollar-denominated T-bill issuance

Hossam Mounir
2 Min Read
The Central Bank of Egypt (CBE) has launched a new EGP 15bn initiative to finance the dual-fuel vehicle conversion plan, with a lump-sum return of 3%. In a Sunday letter to banks, the CBE said that the initiative aims to support the government’s ambitious, recently announced multi-year plan to replace car engines powered by traditional fossil fuels with dual-fuel engines that run on both petrol and natural gas.

The Central Bank of Egypt (CBE) has received 33 offers from local and foreign investors worth $1.2985bn to cover the tender of local treasury bills (T-bills) denominated in the US currency.

The CBE launched this tender on Monday at a value of $1.05bn for a period of 364 days, and it is due on 7 February 2022.

The proceeds of this tender are directed to pay off a previous tender put forward by the bank on 9 February 2021, through which it obtained $1.088bn.

Of these offers, the CBE accepted 27 worth $1.0785, with an interest rate ranging between 2.97% as the lowest price, 3% as the highest price, and 2.994% as an average, while the bank rejected other offers in which the required interest rate reached 4.2%.

The bank will allow subscription to these bills for each of the local banks and foreign institutions, with a minimum subscription of $100,000 and its multiples.

Banks subscribe to US dollar T-bills in the same manner as in local currency T-bills, where each bank submits its bid to the CBE, indicating the amount to be subscribed to in the T-bills and the interest rate it requests. Bids are collected by the CBE for study and acceptance of the appropriate ones.

Local banks rely a lot on these bills to invest their dollar liquidity in a container guaranteed by the government, with an appropriate return, in the absence of other investment aspects for that liquidity, except for the rare joint loans that are offered between separate periods or investing in the global money markets.

The return of these dollar bills is determined according to several indicators, the most important of which are the volume of dollar liquidity in the market, the alternative investment opportunities available to local and foreign banks and financial institutions, and the country’s credit rating.

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