By: Heba El Kordy

Cairo – Mubasher: A recent decline in yields has prompted the Ministry of Finance (MoF) to accept nearly double the demand for its recent treasury-bond auction in order to compensate for its cancelled auctions from last month.

Yields on three-to-seven-year treasury bonds fell to their lowest level since August, data released by the Central Bank of Egypt (CBE) showed.

As for the outcome for Monday’s auction, the MoF accepted nearly double the volume it had originally sought. The ministry accepted EGP 3.27 billion in subscriptions for today’s EGP 1.75 billion auction.

The average yield for seven-year treasury bonds was 18.14%, CBE data showed, indicating that this issuance was three times oversubscribed, even though the MoF’s previous yield offering was 18.32% in its previous auction.

Meanwhile, the average yield for the three-year bonds was 18.13%, its lowest level since July, the data indicated, adding that the bonds were 5.3 times oversubscribed.

Last month, the MoF cancelled all treasury bond issues due to their high yield.

Egypt is planning to issue EGP 4.25 billion in T-bonds this month, down from EGP 13.5 billion in issues that were estimated for September but were later cancelled.

The Egyptian government regularly issues treasury bills and bonds at various maturing periods. Banks are considered the largest holders of the government’s debt instruments. Egypt’s debt instruments, particularly treasury bills, are attractive to foreign investors owing to their high yield.

Egypt is expected to issue EGP 409.6 billion in T-bills and EGP 101.6 billion in bonds in the fiscal year 2018/2019.

The CBE previously said that Egypt’s total foreign debt rose 2.3% quarter-on-quarter, or by $1.8 billion, to $80.8 billion in the first quarter of FY17/18.