Egypt to offer 10 billion Egyptian pounds in maiden 28-day repo sale

Egypt to offer 10 billion Egyptian pounds in maiden 28-day repo sale

Egypt's central bank will offer funds in a new 28-day repurchase agreement, lengthening the maturity of its tenders in a bid to boost a market drained of liquidity by soaring interest rates on treasury bills, bankers said.

July 9, 2012 4:54 by Reuters

Egypt’s central bank will offer funds in a new 28-day repurchase agreement, lengthening the maturity of its tenders in a bid to boost a market drained of liquidity by soaring interest rates on treasury bills, bankers said.

The central bank said it would offer 10 billion Egyptian pounds ($1.65 billion) under the new instrument.

The central bank introduced seven-day repos in March 2011 to manage short-term interest rates after the political and economic turmoil that ousted President Hosni Mubarak, and last month it announced it would offer 28-day repos as well.

The bank accepted 22.3 billion pounds in seven-day repos last week at an interest rate of 9.75 percent. It said last month that the 28-day repos would be variable rate tenders with a minimum bid equal to its seven-day repo rate.

The amount of seven-day repos accepted by the central bank has been gradually increasing at the government’s funding needs grow. In its offerings in May and June 2011 were as low as 6 billion pounds, but early this month one of its weekly offerings was for 36 billion pounds.

($1 = 6.0587 Egyptian pounds)

(Reporting by Mohamed Samir, writing by Patrick Werr; Editing by John Stonestreet)