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German investments in Egypt reach 1.6 bln Euro: Deutsch Ambassador to Cairo
The size of German investments in Egypt reached 1.6 billion Euro within the last period, announced Germany’s ambassador to Egypt, Julius Georg Luy Sunday.
According to the ambassador, the investments include different projects including drinking water and sanitation, renewable energy and building dams.
The ambassador’s remarks came during his visit to Upper Egypt’s Qena governorate.
Egypt’s three and nine-month t-bill yields fall in weekly auction
(REUTERS): Yields on Egypt’s three- and nine-month Treasury bills fell at an auction on Sunday, data from the central bank showed.
Yields on the 91-day bill dropped to an average of 17.744 percent from 18.028 percent the last time similar bills were sold.
Yields on the 266-day bill declined to an average of 17.610 percent from 18.715 percent at the last similar auction.
Bank of America Merrill Lynch recommended in a recent report that investors buy 6-month Egyptian T-bills without hedging them.
Egypt to issue $1.6 bln 1-year Treasury bill -cen bank
It said the settlement date for the U.S. dollar-denominated rollover bill issuance would be Nov. 22. It set Nov. 21 at 1100 (0900 GMT) as the auction deadline.
The pound was trading at between 17.25 and 17.75 against the dollar by 1138 (0938 GMT), after closing at about 16.05 on Saturday.
“There is a lot of pent up demand (for dollars) … There are people who are willing to buy at any price and they are mainly importers of non-essential goods,” said one banker.
Another banker echoed those comments, saying the pound had also weakened on the parallel market where prices were roughly in line with those at the banks.
Sunday’s drop comes after six bankers told Reuters over the weekend that the central bank had informed them verbally that they could supply dollars to importers of non-essential goods provided they prioritise basic imports and obtain the dollars they need on the interbank market.
Egypt floated the pound on Nov. 3 and raised interest rates by 300 basis points in a dramatic move welcomed by businesses as the key to unlocking investment.
It devalued the currency by about a third from the former peg of 8.8 against the dollar and allowed it to drift lower.
Egypt’s dollar peg had drained the central bank’s foreign reserves, which have been hit by reduced foreign investment following political turmoil in the past few years, forcing the bank to impose capital controls and ration dollars.
That prompted desperate importers to turn to a burgeoning black market where the dollar at one point fetched more than twice its official value.
A severe shortage of dollar liquidity when markets opened for the first time after the float had resulted in low volumes and saw the pound weaken to 18 versus the dollar.
The currency strengthened to about 15.50 after it became clear that the International Monetary Fund would approve Egypt’s $12 billion lending programme to support government reforms.
Since the float, more companies have gone to the banks for their dollars, leaving them scrambling for funds while a lack of liquidity means interbank trading got off to a slow start.
Banks have focused on buying up dollars from the informal sector and supplying them to clients rather than selling them on the interbank market.
The central bank’s Monetary Policy Committee held benchmark interest rates steady at its meeting on Thursday.