Average yields drop on Egypt's six-month, one-year T-bills

CAIRO - 10 August 2017: The average yields on Egypt's six-month and one-year treasury bills fell at auction on Thursday, continuing their decline since last week, when the central bank announced a surge in foreign currency reserves.

Average yields on the 182-day bill fell to 18.832 percent from 19.574 percent at the last sale on Aug 3, and yields on the 357-day bill fell to 18.705 percent from 19.348 percent, central bank data showed.

The one-year bill yields have now fallen by a total of 2.25 percentage points and the six-month bill yields by 2.34 percentage points since the central bank announced that foreign currency reserves had hit $36.04 billion, surpassing levels before Egypt's 2011 political uprising.

Demand for Egypt's domestic debt has increased since the central bank floated its pound currency in November as part of an International Monetary Fund loan agreement aimed at reviving the economy.

Foreign purchases in Thursday's sale totalled 2.9 billion Egyptian pounds ($163.47 million), head of public debt at the finance ministry, Sami Khallaf, told Reuters.

Total foreign holdings of Egyptian treasuries reached 270.5 billion Egyptian pounds ($15.25 billion) as of the auction on Aug. 8, he said.

Egypt's central bank has raised its key interest rates by 700 basis points since November when it floated the currency, encouraging foreign investors to buy its high-yielding debt.

Egypt attracted $9.8 billion in foreign investment in domestic debt instruments in the 2016-2017 fiscal year that ended in June, compared to $1.1 billion the previous year.