CAIRO: Average yields on Egyptian 91- and 266-day treasury bills fell for the second auction in a row on Sunday, coming down from their high of several months, days before Egypt is due to hold presidential elections.
For the 91-day t-bill, average yields fell to 10.449 percent from 10.564 percent. For the 266-day bill, they fell to 10.787 percent from 10.942 percent at their last auction on May 11. Sunday's yields were the lowest for the maturities since late April.
On May 4, 91-day and 266-day t-bill yields jumped to their highest in more than four months as demand for government securities declined amid expectations the central bank will cut interest rates next quarter.
At the May 4 auction, the average yield of 91-day bills rose to 10.637 percent and the yield of 266-day bills rose to 11.161 percent, their highest since November.
"The rebounding yields triggered new yield (levels), so those levels are attractive for market participants to bid at, and the market is still liquid," said Khalil El Bawab, asset manager at EFG-Hermes.
"Bidders wanted to build new positions with presidential elections coming up and with the stable government format we're aiming at. The more we approach that, the more rates will go down."
Former army chief Abdel Fattah al-Sisi is widely expected to win presidential elections on May 26-27.
The government has turned mainly to the local money market to finance its public deficit since a popular uprising in early 2011 chased away many foreign investors and put pressure on the local currency.
The central bank kept its key interest rates on hold at its last meeting at the end of April, seeking to find a balance between stimulating the economy and keeping inflationary pressures in check. It is due to hold its next monetary policy meeting on May 29.
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