On Monday, the Central Bank of Egypt (CBE), on behalf of the Ministry of Finance, will issue treasury bills (T-bills) worth $1bn. The proceeds of this tender will be funnelled to cover the value of a previous offering posed by the CBE on 13 December 2016 worth $1.1185bn. The CBE began offering T-bills on 30 November 2011 with an average return of 3.87%. The central bank allows local banks and foreign institutions to buy using US dollars at a minimum of $100,000, or its multiples. The interest rate on the US dollar-bought T-bills is decided in accordance with a number of factors, most prominently US dollar liquidity in the market, alternative investment opportunities available for local and foreign financial institutions that invest in these bills, and the country's credit rating. Since the beginning of 2017, the CBE has offered four auctions: the first on 10 January ($888.8m), the second on 14 February ($1.0929bn), the third on 9 May ($1.21bn), and the fourth on 13 June ($1.713bn). The lowest interest rate offered by the CBE in those tenders ranged between 3.42% and 3.65%, while the highest return reached 3.489-3.7%, marking an average of 3.488% and 3.7%, respectively. Banks operating in the local market rely on these bills to invest their liquidity in euros safely with the government, with an appropriate yield, in view of the lack of other investment opportunities for such liquidity. Exceptions include the rarely available syndicated loans, or investment in global capital markets, with low yield and many risks associated. In a related context, Finance Minister Amr Al-Garhi said on Sunday that the total foreign investments in government debt instruments amounted to $19bn between 3 November 2016 and 6 December 2017.
