CAIRO - 14 November 2022: The Central Bank of Egypt (CBE), on behalf of the Ministry of Finance, is set to issue LE 14 billion in treasury bonds (T-bonds) on Monday, Nov. 14.
The T-bonds were offered in three installments, with the first valued at LE 6 billion with a 1.5-year term, the second worth LE 7.5 billion with a three-year term, and the third worth LE 500 million with a five-year term.
The government borrows through bonds and treasury bills over different periods of time, and government banks are the largest purchasers of them.
The CBE announced, on Oct. 27, the issuance of several decisions related to the exchange rate, interest rates and letters of credit for importing.
The decisions which were taken in an exceptional meeting included raising the Central Bank of Egypt’s (CBE) interest rates by 200 basis points or 2 percent, in an exceptional meeting.
The CBE’s committee also announced moving to a durably flexible exchange rate regime, leaving the forces of supply and demand to determine the value of the Egyptian pound against other foreign currencies. “This will take place while prioritizing the primary goal of achieving price stability, and building up sustainable, adequate levels of Foreign Exchange Reserves,” according to the MPC.
Moreover, the CBE will begin the process of gradually repealing the use of Letters of Credit for import finance, to be fully canceled in December 2022.
The decisions also included working towards building the foundation for a derivatives market to further deepen the foreign exchange market and enhance its liquidity.
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