CBE receives $605.6m worth of offers for dollar-denominated local T-bills

The Central Bank of Egypt (CBE) recently received 19 offers totalling $605.6m from both local and foreign investors in response to a bid for local treasury bills denominated in US currency.

The CBE issued this tender today, valuing it at $500m for a one-year term due in June 2025. The proceeds from this tender will be used to settle a previous tender issued on 6 June 2023, where the CBE withdrew $554.1m.

Out of the 19 offers received, only 17 were accepted, with a combined value of $500.6m. The interest rate for these accepted bids ranged between 5.148% and 5.149%, remaining unchanged from the last similar bid offered by the bank on 29 April 2023.

Interestingly, some investors requested a return of up to 6.099% for their subscription to this tender, but their proposals were rejected.

CBE allows both local banks and foreign institutions to subscribe to these bills, with a minimum subscription amount of $100,000 and multiples thereof.

Investors participate in dollar-denominated bills like local currency bill offers. Each bank or “main dealer” submits a subscription application to the CBE, specifying the desired amount to be subscribed and the requested interest rate. These applications are then reviewed by the CBE.

The return on these dollar bills is determined based on several indicators, including interest rates on the USD in global markets, alternative investment opportunities available to local and foreign banks, and the country’s credit rating.