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Yields on Egypt’s T-bills hit lowest since May

Yields on Egypt’s T-bills hit lowest since May
The MPC reduced overnight deposit rate and overnight lending rate by 100 basis points (bps) to 15.75% and 16.75%, respectively

By: Heba El-Kordy

Cairo – Mubasher: Total yields on Egypt’s 273-day and 91-day treasury bills (T-bills) sold in Sunday’s auction amounted to EGP 9.4 billion, down EGP 7.6 billion from the requested sum of EGP 17 billion, data by the Central Bank of Egypt (CBE) showed on Monday.

This came following the CBE’s Monetary Policy Committee (MPC) decision to slash interest rates by 1%.

The MPC reduced overnight deposit rate and overnight lending rate by 100 basis points (bps) to 15.75% and 16.75%, respectively, during its meeting last Thursday. 

The average yield of the 91-day notes reached 17.453% with EGP 102.9 billion in proceeds, according to the CBE.

Meanwhile, yields on the 273-day T-bills reached 17.68%, marking the lowest level since May 2018, with EGP 9.3 billion in proceeds, the bank highlighted.

Egypt’s debt instruments, especially T-bills, are attractive to foreign investors owing to their high yield. State-run banks are the largest holders of the government’s debt instruments.

The MoF plans to issue EGP 146 billion in debt instruments in February 2019, coinciding with the recent drop in yields on T-bills and T-bonds.

The North African state aims to slash debt-to-gross domestic product (GDP) by 92% this year.

The MOF previously stated it aims to finance the general budget deficit of EGP 511.2 billion in fiscal year 2018/2019.

Egypt aims to issue EGP 409.6 billion T-bills and EGP 101.6 billion bonds in FY18/19.

 

Translated by: Mai Ezz El-Din