Egypt: CBE to auction $500mln in US dollar-denominated T-bills

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The Central Bank of Egypt (CBE) is set to auction local Treasury bills denominated in US dollars worth $500m on Monday. These bills, with a one-year maturity period, are scheduled to mature in June 2025. The proceeds from this auction will be used to settle a previous auction issued on June 6, 2023, during which the central bank raised $554.1m.

In a similar auction held on 29 April 2023, the CBE received 23 bids totalling $1.1176bn from both local and foreign investors. The auction, valued at $980m, also had a one-year maturity, set to expire on 29 April 2025. According to data published on the central bank’s website, 20 of these bids were accepted, amounting to $997m, with interest rates ranging between 5.148% and 5.149%, consistent with the last similar auction held on 5 February 2023.

Notably, some investors requested returns as high as 6.099% for participating in this auction, but their requests were subsequently rejected.

Local banks and foreign institutions are allowed to subscribe to these dollar-denominated Treasury bills, with a minimum subscription of $100,000 and multiples thereof. Investors follow the same subscription method as for local currency bill offerings. Each primary dealer submits a subscription request to the central bank, specifying the desired amount and interest rate. The central bank then reviews these requests and accepts suitable bids.

The return on these dollar-denominated Treasury bills is influenced by several factors, including global dollar interest rates, alternative investment opportunities available to local and foreign banks and financial institutions, and the country’s credit rating.