CBE to launch $900m T-bill auction
The Central Bank of Egypt (CBE) will conduct a $900m local treasury bill auction tomorrow, Monday. These US dollar-denominated T-bills will mature on 2 December 2025.
The proceeds from this auction will be used to settle a previous auction held on December 5, 2023, through which the CBE raised $990m.
In a recent auction on 11 November 2024, the CBE received 30 bids totaling $1.739bn to cover a $1.5bn offering with a one-year maturity, set for 12 November 2025. The bank accepted 21 bids amounting to $1.5743bn, with interest rates ranging between 4.488% and 4.5%, averaging 4.498%. This is a decrease compared to the 5.148% to 5.149% range in the previous auction on 3 June 2024.
Some investors requested returns of up to 5.25% for their subscriptions, but these requests were declined.
The auction is open to both local banks and foreign institutions, with a minimum subscription of $100,000 and increments thereof. Investors follow the same bidding process used for local currency auctions. Each primary dealer bank submits its subscription request to the CBE, specifying the amount and desired interest rate. The CBE then reviews and approves appropriate bids.
The yield on these dollar-denominated treasury bills is determined by various factors, including global U.S. dollar interest rates, alternative investment opportunities for both local and foreign financial institutions, and the country’s credit rating.
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