Egypt Repo Bids Drop as Bond Demand Declines on High Yields

Egypt accepted bids for 6.2 billion Egyptian pounds ($1.3 billion) in repurchase contracts, compared with 9.8 billion pounds in the last sale, as local investors needed less funding.

The contracts, or repos, allow government security holders to sell them back to the central bank to access funds for a week at 9.25 percent, according to central bank data on Bloomberg. Egypt raised 1 billion pounds out of a planned 7.5 billion pounds at a sale of three-, five- and seven-year bonds on Nov. 3 because investors demanded high yields. There were no debt sales this week because of a public holiday.

The repurchase facility was started in March to ease pressure on local banks, which became the primary investors in government securities after foreign investors withdrew amid the uprising that ousted Hosni Mubarak as president. The interest rate on repo contracts hasn’t changed since the start.