Euro-Denominated T-Bills Expected To Witness High Demand

A number of bankers hailed the Cabinet’s move concerning the launch of the first euro-denominated treasury bills, with value of €400 million and a maturity of one year to be due in August 2013, through the Central Bank of Egypt (CBE).

Bankers expected such T-bills to witness high demand from banks, financial institutions and people who transfer their euro- denominated funds out of the country to invest them with an interest rate not exceeding 2%, as the Egyptian euro-denominated T-bills has a return of 3.5%.

Mohamed Badra, member of board of directors of Banque Du Caire, said these T-bills will impact the processes of issuing letters of credit and letters of guarantee for the Egyptian investors who wish to import goods from the European Union. Offering €400 million only in T-bills will be easily sold, Badra affirmed.

The Egyptian banks have good amount of foreign currencies especially the euro currency, he noted, adding that the stability of political and security situations in the current period will increase the foreign investments in Egypt which will in turn increase the euro cash flows. Banks will subscribe to the euro-denominated T-bills with euros. As usual, banks will submit their bids to the CBE which will choose the most suitable offers.