On Wednesday, the Central Bank of Egypt said it had offered three-year treasury bonds with a variable interest rate linked to the bank’s deposit, lending, and credit rates currently stand at 16.25%, 17.25%, and 16.75%, respectively.
According to experts, the step reflects the Central Bank of Egypt’s desire to respond to investors’ expectations that interest rates will take an upward curve during the coming period.
The Central Bank of Egypt offered three-year bonds worth one billion Egyptian pounds, at an increase of 4.25% above the average price of the bank’s deposit, lending, and credit rates. The return is paid every three months, with a review of the return every quarter if the bank approves an increase or decrease in interest in the upcoming meetings of its monetary policy committee. The Central Bank of Egypt agreed to sell bonds at twice the target after an increase in purchase orders, which approached six times the mark. Last year, the Central Bank of Egypt raised the interest rate by 8% to combat inflation. Investors’ appetite for short-term debt is still intense, returning the country to the risks of so-called hot investments.