At a recent auction, sales of Egyptian 91-day treasury bills skyrocketed to 87.07 billion Egyptian pounds (USD 2.94 billion), up from 14.67 billion pounds the previous week. This increase occurred as investors continued to pour back following a significant drop in the value of the pound in comparison to the dollar.
According to data provided by the central bank, sales of 273-day bills, which were also put up for auction, skyrocketed to 10.72 billion pounds from a previous week’s total of 135.6 million pounds.
According to the statements made by the central bank, the average yield on 91-day bills increased to 20.52% from 20.281%, and the average yield on 273-day notes increased to 21.484% from 20.949%.
After opening the day at 27.60 to the dollar, the Egyptian pound USDEGP fell as low as 32.20 to the US dollar. Since then, however, it has strengthened to 29.65.
At the beginning of 2023, one dollar was worth less than twenty-five pounds. Up until 2022 March, the pound’s value had been maintained at a rate of fewer than 16 dollars, which is nearly 50 percentage points more than its present value.
To fulfil a pledge made to the International Monetary Fund (IMF) as part of a USD 3 billion funding agreement announced in October 2022, Egypt has been gradually removing its dollar peg to eventually allow its currency to float freely.
Because of the conflict in Ukraine, Egypt has seen a decline in tourism revenue, an increase in the cost of importing commodities, and a withdrawal of more than USD 20 billion in capital from the economy by foreign investors. As a result, Egypt is currently experiencing a scarcity of foreign currency. Since March 2022, the value of one pound has dropped by around 51%.
At a recent auction, both sales of 182-day and 364-day treasury bills increased significantly.
It had been more than a year since the previous record for the quantity of 182-day bills sold at a single auction, and it had been more than four months since the previous record was set for the amount of 364-day bills.