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Following devaluation, foreign investors return to Egyptian T-bill auction

Published

10 months ago

March 9, 2024

After a protracted break, foreign investors have started buying Egyptian Treasury bills again, according to three bankers. The central bank’s data revealed that local currency one-year bills were almost three times oversubscribed during an auction on Thursday.

A day after the central bank boosted interest rates by 6% and allowed the pound to weaken significantly versus the dollar, one-year T-bills worth 87.8 billion Egyptian pounds ($1.78 billion) were sold at an average yield of 32.303%, according to the bank’s figures.

According to the results, Egypt received bids totaling 254.0 billion Egyptian pounds ($5.15 billion) for the one-year T-bill auction.

The central bank announced that it has sold 14.2 billion Egyptian pounds ($287.9 million) worth of T-bills with an average yield of 31.837% during a sixth-month auction.

One-year T-bills that were sold on Thursday had an Egyptian pound value that was much greater than what it had been in weekly auctions since the beginning of the year, when the average yield ranged from 26.607% to 29.913%.

Six-month bills were valued at a greater percentage than in all but one of this year’s prior auctions, where an average yield of 26.001%–28.579% was available.

According to information provided by a banker, foreign investors placed bids totaling $2.26 billion over the course of the two auctions, of which the central bank accepted $825.2 million. There is no distinction between domestic and foreign buyers in the central bank data.

Before investors withdrew from the carry trade—also referred to as buying T-bills by foreigners—at the start of the conflict in Ukraine two years ago, Egypt relied heavily on this risky source of foreign exchange inflows.

Taking advantage of Egypt’s high interest rates, foreign investors change dollars into Egyptian pounds to purchase T-bills with maturities ranging from three months to one year. The investors plan to repatriate the proceeds after reconverting them into foreign currency.

Related Topics:Devaluation Egypt Featured T-Bills

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VenturesNow

Moroccan annual inflation rises to 0.8% in November

Published

1 day ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

VenturesNow

Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

2 days ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”