CAIRO: The average yield on Egyptian treasury bills dipped on Thursday at the central bank's first auction since it lowered the reserve requirement on local currency deposits to 12 percent from 14 percent. The central bank said it sold all the T-bills it was offering. Analysts said lowering the reserve ratio would free up funds sitting idle at the central bank and supply banks with more cash to lend, both to the government and to business. A year of political turmoil has increased the government's borrowing needs by hammering the country's economy and lowering tax revenue while sparking worker demands for higher salaries and more benefits, causing T-bill yields to soar. At Thursday's auction, the average yield on 182-day T-bills declined to 14.799 percent from 14.819 percent a week earlier. The bank sold bills worth LE 2.95 billion instead of the LE 3 billion it had offered. The average yield on 357-day T-bills slid to 15.768 percent, down from 15.940 at the last issue on March 13, and bills worth LE 3.5 billion ($579.83) were sold, the same amount the central bank had sought. The central bank sells the bills on behalf of the Ministry of Finance.
