Egypt Banks Pass on Repos, Signaling Market Has Enough Funds

The central bank had made 1 billion Egyptian pounds ($168 million) in repo agreements available today and received no bids, according to data it posted on Bloomberg. A central bank official, who declined to be identified, said no bids were received.

“It’s a good sign,” said Moustafa Assal, head of fixed- income at Cairo-based investment bank Beltone Financial Holding SAE. “It means banks don’t need to refinance their positions because there are enough Egyptian pounds in the system.”

Foreign investors sold treasury bills valued at 34.7 billion pounds in the first four months of the year, according to central bank data, amid the uprising that ousted President Hosni Mubarak in February. That left local investors to buy Egypt’s local currency debt at weekly auctions. The central bank started the repurchase facility in March to ease pressure on local banks, allowing them to sell the securities back for one- week at an interest rate of 9.25 percent.