Egypt delays bond sale results as short-term yields soar

CAIRO, July 21 Mon Jul 21, 2014 12:03pm EDT

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CAIRO, July 21 (Reuters) - Egypt delayed announcing the results of a bond auction on Monday after last week's hike in the central bank's benchmark rates sent yields in shorter-term debt soaring.

Egyptian treasury bill yields jumped more than 1 percent on Sunday, the first trading day after the central bank unexpectedly raised interest rates by 100 basis points in an attempt to hold down inflation.

The bank had announced a bond auction for 18-month bonds worth 1.5 billion Egyptian pounds ($209.8 million), 3-year bonds worth 2 billion and 7-year bonds worth 750 million. But results had not been announced as of 1530 GMT, after banking hours.

At the last auction of those maturities, on July 8, the average yield was 11.579 percent on the 18-month bond, 12.690 percent on the 3-year and 14.536 percent on the 7-year bond.

Bond and treasury-bill auctions have been cancelled or capped occasionally in the past, for example, in May the central bank delayed announcing the result of a bond auction amid rising yields, before accepting about half the volume it had offered.

"Traders anticipate much higher yields on the back of the rate hike and yesterday's auction," one Cairo-based trader said.

"The bonds get settled on Tuesday so they (the central bank announcement) shouldn't be any later than tomorrow," he said. ($1 = 7.1501 Egyptian pounds) (Reporting by Shadia Nasralla; Editing by Louise Ireland)

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