CAIRO Nov 25 Yields on Egyptian 182-day T-bills
rose at an auction on Thursday as a weakening Egyptian pound and
uncertainty about the fate of a $4.8 billion IMF loan drove up
the cost of government borrowing.
The average yield climbed to 14.104 percent from 13.300
percent at the last issue on Dec. 25. Last week's auction was
"Rates have been on the rise after the political tension
since the presidential decree," said Cairo-based fixed-income
dealer Ahmed Kheir El Din. "The uncertainty about the IMF loan
is also weighing on trader sentiment," he said.
Political turmoil in recent weeks over a new constitution
has put pressure on the pound as Egyptians scrambled to sell
local currency, forcing the central last weekend to impose a new
currency regime to try and preserve depleted foreign exchange
reserves. The pound hit a new record low of 6.42 pounds against
the U.S. dollar on Thursday and has lost 3.7 percent of its
value against the dollar since last week.
The central bank accepted bids for 2 billion Egyptian pounds
($312.91 million) worth of 182-day T-bills - the same amount it
The average yield on 357-day T-bills also auctioned on
Thursday stood at 14.320 percent. The central bank accepted bids
worth 2.5 billion pounds, less than the 4 billion pounds
offered. The yield at the previous auction of 357-day T-bills
was not immediately available.
Investors are also worried that Egypt will not be able to
enforce tax increases required if it is to secure a badly needed
loan from the International Monetary Fund to help support its