Egypt Offers 21 Billion Pounds of 7-Day Repos; Dollar Bonds Fall

Egypt will offer seven-day repurchase agreements today valued at 21 billion Egyptian pounds ($3.5 billion), after accepting bids for 15.7 billion pounds last week. The dollar bonds retreated for a second day.

The contracts allow government security holders to sell them back to the North African country’s central bank to access funds for a week at 9.75 percent, according to the regulator’s data on Bloomberg. The facility was started in March 2011 to ease pressure on funding at local banks as they increased holdings of government debt amid political unrest.

Yields on Egyptian domestic debt have receded from record highs after the central bank lowered the local-currency reserve requirement for banks, making more cash available for investment in government debt. The finance ministry sold one-year treasury bills last week at an average yield of 15.577 percent, down from 15.975 percent on Feb. 9, the highest level since Bloomberg started tracking the data in 2006.

The yield on the country’s 5.75 percent dollar bonds due in 2020 rose two basis points, or 0.02 of a percentage point, to 6.91 percent at 11:18 a.m. in Cairo, according to prices compiled by Bloomberg. The Egyptian pound weakened less than 0.1 percent to 6.0398 per dollar.

To contact the reporter on this story: Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net