Local banks and foreign financial institutions offered to invest $1.2989bn in treasury bills issued by the Central Bank of Egypt (CBE) last week.
On behalf of the Ministry of Finance, the CBE has been offering $1bn treasury bills (T-bills).
According to data obtained by Daily News Egypt, the CBE accepted liquidity offered to it worth $1.1489bn.
The proceeds of this tender are to pay the value of a previous tender issued by the CBE on 13 December 2016, worth $1.1185bn.
The highest interest rate on investment in these bills was 3.5%, while the lowest rate was 3.47% and the average 3.495%.
The CBE started issuing T-bills on 30 November 2011, with an average return of 3.87%.
The central bank allows subscription to these T-bills by both local banks and foreign institutions with a minimum subscription of $100,000 and its multiples.
The dollar exchange rate is determined according to several indicators, the most important of which is the amount of dollar liquidity in the market, alternative investment opportunities available to banks and local and foreign financial institutions, and the country’s credit rating.
Since the beginning of this year, the CBE has offered four dollar bills, the first on 10 January, worth $888.8m, the second on 14 February, worth $1.0929bn, the third on 9 May, worth $1.2bn, and the fourth on 13 June, worth $713.1bn.
The lowest interest rate granted by the CBE to investors in the four bids ranged from 3.42-3.65%, while the highest interest rate ranged from 3.489-3.7%. The average interest rate ranged from 3.488-3.7%.
Banks operating in the domestic market rely heavily on these T-bills to invest their dollar liquidity in a government-guaranteed pot with an adequate return, with no other investment available for that liquidity, except for rare interrelated loans or investments in global markets with low, risky returns.