Bloomberg News

Egypt T-Bill Yields Drop to 1-Year Low on Expectations for Aid

November 11, 2012

Egypt’s borrowing costs for three months dropped to the lowest in a year amid expectations the government will receive $500 million in aid from Qatar and $4.8 billion in loans from the International Monetary Fund.

The Finance Ministry raised 1 billion pounds ($163.7 million) in three-month treasury bills, with the average yield falling 11 basis points to 12.3 percent, the lowest since November 2011, according to central bank data on Bloomberg. The ministry also sold 3.5 billion pounds in nine-month notes and the average yield dropped 17 basis points, or 0.17 percentage point, to 12.95 percent, the data show.

Egypt’s borrowing costs have declined from record highs after the June election of President Mohamed Mursi, who resumed talks with the IMF for a loan to reduce the budget deficit and bolster foreign-currency reserves, which plunged more than 50 percent after last year’s uprising.

The yield on Egypt’s 5.75 percent dollar bonds due April 2020 fell four basis points last week to 5.26 percent, according to data compiled by Bloomberg. The pound, subject to managed float, weakened 0.2 percent to 6.1154 a dollar.

To contact the reporter on this story: Alaa Shahine in Dubai at asalha@bloomberg.net

To contact the editor responsible for this story: Alaa Shahine at asalha@bloomberg.net


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