The Central Bank of Egypt (CBE) received 28 bids totalling $1.719bn in a tender for USD-denominated treasury bills.
The CBE had initially offered $1.610bn in one-year treasury bills, maturing on November 12, 2024. The proceeds from this tender will be used to repay a previous tender offered on November 15, 2022, through which the CBE obtained $1.6bn.
The CBE accepted 21 bids from those offers, totalling $1.612bn, with interest rates ranging between 5.148% and 5.149%. There was no significant change from the yield of a similar tender offered on June 5, 2023. Some investors requested a yield of up to 6.009%, which was rejected.
Both local banks and foreign institutions can subscribe to these bills, with a minimum subscription of $100,000.
Investors in the dollar-denominated bills subscribe in the same manner as local currency-denominated bill offerings. Each “primary dealer” bank submits a subscription request to the CBE, specifying the amount they want to subscribe to in the bills and the interest rate they are seeking. The CBE collects the requests for study and accepts those deemed appropriate.
The yield of these dollar-denominated bills is determined based on several indicators, including:
• Interest rates on the dollar in global markets
• Alternative investment opportunities available to local and foreign banks and financial institutions
• The credit rating of the country
The CBE’s issuance of dollar-denominated treasury bills is an important tool for managing the country’s foreign reserves and attracting foreign investment.