Central Bank of Egypt (CBE) data showed on Monday that two auctions for three-year and seven-year treasury bonds (T-Bonds) worth EGP 3.5 billion ($195.1 million) were cancelled on Monday after banks and investors demanded high interest rates.
This is the third time in a row that T-Bonds auctions were cancelled due to demand for high rates of return that Egypt sees "illogical", the Finance Ministry said when two similar auctions were cancelled earlier this month.
Two banks, one of which took part in an auction this week, said banks and investors had requested interest rates of 18.70 percent to 18.90 percent.
"Foreigners are selling in the market with a yield of about 19 percent", a banker told Reuters on condition of anonymity.
It was not immediately clear whether the Ministry of Finance and the Central Bank of Egypt would issue the bonds again in a private auction, similarly to what happened two weeks ago when the state-owned National Investment Bank (NIB) bought the bonds.
The Ministry of Finance said when cancelling previous bond auctions this month that the required return rates "do reflect neither the good economic and financial performance nor improved credit ratings ... but were affected mainly by the risks associated with emerging markets".