The Central Bank of Egypt (CBE) is set to auction local USD-denominated treasury bills worth $980m on Monday, with a maturity date in April 2025.

The proceeds from this auction will be allocated to repay the maturity of a previous tender offered on April 30, 2023, from which the Central Bank withdrew $1.0076bn.

During the auction, the Central Bank received 28 bids from both local and foreign investors, totaling $1.196bn, covering a similar tender offered on February 5 of the same year. This earlier tender was worth $1bn and is set to mature on 4 February 2025.

According to data published on the Central Bank’s website, the bank accepted 18 bids worth $1.061bn at interest rates ranging between 5.148% and 5.149%. Interestingly, some investors requested a yield of up to 6.25%, but their participation in this tender was ultimately rejected.

The Central Bank allows subscription to these bills for both local banks and foreign institutions, with a minimum subscription amount of $100,000 and its multiples.

Investors subscribe to the dollar-denominated bills in a manner similar to local currency-denominated bills. Each primary dealer submits a subscription request to the Central Bank, specifying the intended subscription amount and the desired interest rate. The Central Bank then aggregates and reviews these requests, accepting suitable ones.

The yield on these dollar-denominated bills is determined based on several indicators, including interest rates on the dollar in global markets, alternative investment opportunities available to local and foreign banks and financial institutions, and the credit rating of the country.

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