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Egypt T-bill auction falls short of expectations

Bankers say demand for treasury bills has declined after turmoil

Reuters , Monday 7 Mar 2011
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Egypt's central bank said it sold 3 billion Egyptian pounds in domestic treasury bills on Sunday, well short of the LE4.5bn it had offered.

Bankers say demand for Egyptian treasury bills has declined because of the political turmoil that ousted Hosni Mubarak last month, partly on concern the value of the pound will depreciate in coming months.

The bank had offered LE3.5bn of 266-day T-bills, but reduced the amount to E2bn. The average yield was 12.473 per cent.

Central bank Deputy Governor Hisham Ramez said the bank had received LE4.2bn in bids for the 266-day bills, but the yields on some of the bids were higher than what the Finance Ministry was willing to pay.

"These were the amounts the Finance Ministry was willing to buy," Ramez said by telephone.

The central bank also sold LE1bn of 91-day T-bills, the same amount it had asked for, at an average yield of 11.487 per cent, up from 11.097 per cent at last week's auction.

Total bids on the 91-day bills were LE2bn, Ramez said.

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