The yield on the bills falls Interest rates on government treasury bills fell 91 and 266 days at a rate close to half a percentage point in the first tender after the fourth rate cut this year by the central bank.
The Ministry of Finance issued 91-day treasury bills worth LE 9.250 billion. The bank received offers to subscribe for LE 9.853 billion, of which the same value was offered without any increase.
The yield on the bills falls
The highest return on 3-month Treasury bills was 15.50%, while the lowest yield was 14.50%. The IPO was only covered once.
The average yield on treasury bills declined by 266 days to 15.09% from 15.51% at the last tender for the same term, down 42 basis points.
The government issued LE 9.750 billion in bills for this period. The bank received LE 8.466 billion worth of bids, of which LE 5.950 billion was accepted, down LE 3.8 billion from the value offered.
The highest return for this period was about 15.16% while the lowest return was 14.50% while the IPO was not covered.
The Central Bank cut interest rates for the fourth time this year, by 1% to 12.25 and 13.25% on the deposit and lending in Corrador, bringing the total reduction since January 2018 to 6.5%.
For his part, Mahmoud Najla, executive director of money markets and fixed income at the National Investment Management Company, said that the decline in interest rates is in line with market expectations of the decision of the Monetary Policy Committee of the Central Bank of the reduction.
He pointed out that a large number of investors resorted to buying longer-term securities up to a year for Treasury bills, especially with the announcement of the results of inflation rates and the occurrence of declines, which affected the liquidity in the market.
He added that the average interest rates at the level of the different terms of the treasury bills during the next bids will be between 14.50 and 15.50%, but will not exceed that percentage.
He said that interest rates remain attractive to foreign investors due to the persistence of a positive real interest rate of 4 to 5%, compared to other markets.
Najla explained that this period of the year usually sees a quiet pace of foreign investments with government debt instruments until the beginning of the year and the opening of new centers, which lead to strong investments in the first months of the year.
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