CBE to issue bid for local treasury bills denominated in USD, worth $1bn

Hossam Mounir
2 Min Read

The Central Bank of Egypt (CBE) will tender local treasury bills denominated in the USD worth $1bn for a period of 364 days that will be due on 2 May 2023 on Thursday.

The proceeds of this bid will be directed to pay the maturity of a previous bid that the CBE put forward on 4 May 2021, through which it obtained $988.5m.

The CBE received 33 offers from local and foreign investors worth $1.2985bn to cover the last bid it put forward last February.

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

The CBE allows subscription in these bills for each of the local banks and foreign institutions with a minimum subscription of $100,000 and its multiples.

Banks subscribe to USD bills in the same manner as EGP bills, with each bank submitting its bid to the CBE and indicating the amount to be subscribed to in the bills and the interest rate it requests. Bids are collected at the CBE for study and are then accepted if deemed appropriate.

Banks operating in the local market 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 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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