Egypt Prevails Over Banks as Borrowing Costs Drop: Arab Credit

Egypt’s falling borrowing costs show the government may have won a showdown with creditors by cutting its budget deficit target and canceling a debt sale after yields hit a three-year high.

Yields on treasury bills fell yesterday for the third straight auction after the central bank called off the first sale in the fiscal year that started July 1 when investors demanded higher returns. The average yield on 3.5 billion Egyptian pounds ($588 million) of nine-month notes dropped 21 basis points from last week’s auction, the most since October, to 12.681 percent, according to Finance Ministry data.