Egypt held its first auction for local currency treasury bonds in four months on Monday after a pause amid financial uncertainty led to a lack of demand for longer-term instruments, bankers said.

The central bank said on its website that it was offering 2.5 billion Egyptian pounds ($51 million) in three-year bonds and 250 million pounds in five-year bonds. The result of the auction will be announced later on Monday, including the amount accepted and the yields paid.

Investor confidence rapidly returned last week after Egypt devalued the pound to about 50 to the dollar from the previous 30.85 and signed an expanded $8 billion financial support package with the International Monetary Fund.

Local investors and banks had been putting their funds instead into shorter-term treasury bills of maturities of one year or less and demanding high yields for longer maturities. At the same time, the finance ministry preferred not to lock itself into longer-term funds at a time of uncertainty, bankers said.

The central bank has hiked overnight interest by a total 800 basis points in the last two months.

Bankers said foreign investors were actively bidding for the bonds in the Monday auction.

Foreign investors last week resumed treasury bill purchases after a long absence, bankers said. ($1 = 48.9700 Egyptian pounds)

(Reporting by Patrick Werr; Editing by Aidan Lewis and Kevin Liffey)