The Central Bank of Egypt has managed to attract more than EGP 21 billion in investments from EGP treasury bills (T-bills).
The CBE offered 266-day T-bills and 91-day T-bills in an auction on Sunday with the aim of attracting EGP 19 billion, with interest rates ranging between 12.9 percent and 13.6 percent.
There were 278 bids made for the 266-day term T-bills, while 222 bids were submitted for the 91-day T-bills, with total investments reaching over EGP 43 billion.
The CBE has accepted 207 bids for the 266-day T-bills, with total investments of about EGP 15.6 billion, and 140 bids for the 91-day T-bills, with total investments of about EGP 5.9 billion, bringing the total to more than EGP 21 billion.
T-bill auctions are an instrument that the government uses to finance the public budget in order to bridge the budget deficit.
In August, the CBE announced that Egypt’s net international reserves (NIR) grew slightly to reach $38.36 billion by the end of August, up from $38.31 billion recorded in July, which is the third time the NIR saw an increase since the significant drop it had witnessed in March, where it recorded $40 billion, down from $45.4 billion, on the back of the COVID-19 pandemic.
In a recent report, Goldman Sachs said that Egypt’s economy was still robust and is growing in a way that can make it the strongest among emerging markets.
The report revealed that around $10 billion, out of $20 billion, returned to the Egyptian market after exiting the market (from March through June) amid the onset of the coronavirus pandemic. The report predicted Egyptian expat remittances to see an improvement that will enhance the country’s NIR.
Egypt’s NIR is expected to stand at $38.5 billion by the end of the current quarter (ends in September), but to bounce back to reach $43 billion in 12 months’ time, according to Trading Economics (TE).
In the long-term, TE expects Egypt’s NIR to trend around $45 billion in 2021 and about 46 billion in 2022.
The Monetary Policy Committee at the CBE is expected to hold a meeting on Thursday to review the key interest rates amid expectations that it will keep the current rates.