Yields on Egyptian 182-day treasury bills edged up and held steady on 364-day bills at an auction on Thursday, suggesting a recent slide in rates may have run its course for now until Egypt agrees an IMF loan to shore up its finances.
Egyptian borrowing costs had fallen sharply in recent weeks as a new government stepped up efforts to secure $4.8 billion from the International Monetary Fund.
Talks have begun but a visit to Cairo by an IMF team that was supposed to happen in late September was delayed this week until late October as Egypt finalises its economic reform plans.
The average yield on 182-day bills worth LE1 billion ($164 million) for issue on 9 October was 13.221 per cent, up from 13.059 per cent for bills issued on 2 Oct, according to the central bank, which sells them for the Finance Ministry.
The average yield on LE3 billion worth of 364-day bills was 13.757 per cent, little changed from the 13.803 per cent on bills issued on 25 September.
In both cases, the central bank sold the same amount of bills it had offered on behalf of the Ministry of Finance.
The ministry cancelled a T-bill auction on Wednesday in a move traders said was intended to show the government was intent on holding rates down.
"I think we will pause at these levels for a while. We dropped by as much as 2.5 percentage points in just a few weeks," said a fixed-income trader, adding that current levels were still attractive to banks and acceptable to the ministry.
He said foreigners would remain cautious until Egypt secured the IMF loan.
"I don't see us going below 13 per cent until there is some major change such as an IMF loan or some large external sums being finalised," the trader added.