Egypt will offer a record 23 billion pounds ($3.8 billion) of repurchase agreements today as the government sold more debt than targeted in March amid declining yields. Dollar bonds fell for a second day.
The seven-day repos allow holders of government debt to sell them back to the central bank to access funds for a week at 9.75 percent, according to central bank data on Bloomberg. The regulator accepted all 19 billion pounds of repos last week after receiving bids for 22.6 billion pounds, the data show.
Local banks have stepped in to buy government debt as foreign investors departed amid the unrest that followed the ouster of President Hosni Mubarak more than a year ago. Public banks increased holdings of treasury bills by 34 percent to 100.7 billion pounds last year, according to the most recent central bank data. Foreign investors sold 51.5 billion pounds of the notes.
The finance ministry has exceeded its 51.5 billion-pound debt sale goal in March by almost 8 percent, after falling 23 percent short of the 118.5 billion pounds it targeted in the first two months of the year, according to ministry data. Yields soared by more than 2 percentage points on nine-month and one- year securities since October. The central bank on March 20 reduced by two percentage points the local-currency reserve requirement for banks to help “ease credit conditions in the market.” The ratio now stands at 12 percent.
The yield on the country’s 5.75 percent dollar bonds due in 2020 advanced three basis points, or 0.03 percentage point, to 6.42 percent at 10:36 a.m. in Cairo, according to prices compiled by Bloomberg. The rate has dropped 158 basis point in the first quarter. The Egyptian pound was little changed at 6.0375 a dollar.
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