Yields on Egyptian treasury bills edged up at auction on Thursday, in a further sign that a drop in yields since the government asked for an IMF aid package in August may have come to an end as hopes for a quick accord recede.
The average yield on 182-day treasury bills climbed to 12.903 per cent, from 12.818 per cent at last week's auction, while the yield on 364-day bills edged up to 13.150 per cent from 13.143 per cent at the previous auction on 18 October.
Yields began falling after the new government led by Prime Minister Hisham Qandil asked the International Monetary Fund for a $4.8 billion loan on 22 August and after Qatar and other countries agreed to extend credit to Egypt. But at an auction last week the yield on the 182-bill edged up for a second week in a row.
An IMF team arrived in Cairo on Tuesday to resume talks on the loan, but traders say the government faces a huge challenge in selling austerity measures to a public whose economic expectations have risen since last year's popular revolt.
"The government hasn't communicated its economic reform programme to the public yet and hasn't communicated the progress being made. It's getting blurry," said a trader who asked not to be named.
The central bank, which sells the bills on behalf of the Finance Ministry, sold all the bills the ministry had offered.