CAIRO: The median overnight interbank rate on the pound rose to 8.65 percent on Thursday from Wednesday s 8.528 after auctions for higher-yielding certificates of deposit drained market liquidity, traders said. The recent auctions we have seen in the market have absorbed liquidity and there is a demand for high-yielding certificates, one dealer said. We have seen lending rates above 9 percent. The bank auctioned 364-day t-bills worth LE 1 billion ($174 million). Banks tend to prefer to invest in higher-yielding central bank instruments, either treasury bills or certificates of deposit, but revert to trade on the interbank market in the absence of fresh auctions. Four out of 10 banks contacted by Reuters had dealt overnight money at rates between 8.5 and 8.8 percent, compared with a reported range of 8.4 to 8.65 percent on Wednesday. One bank reported dealing in one-week money, at a rate of 8.7 percent, compared with rates of 8.6 and 8.7 percent on Wednesday. The central bank effectively controls the range of overnight rates by offering 8 percent on overnight deposits and lending at 10 percent. By 10:00 GMT, the pound had strengthened slightly to LE 5.7394 to the dollar, compared with Wednesday s closing weighted average of LE 5.7396. Agencies
