The median overnight interbank rate on Egypt's pound edged down to 9.5 percent on Monday from 9.603 percent on Sunday, with a central bank CD auction failing to suck the liquidity from the market, bankers said.
The central bank was auctioning a 121-day certificate of deposits worth 2.7 bbillion pounds ($472 million) "The rates are a bit down today because not many banks are interested in throwing money into a long-term auction," said one banker who did not buy the central bank paper.
"Since the central bank's latest increase in interest rates, many are expecting another hike so we were reluctant to invest in long-term deposits," he said.
The central bank, which keeps overnight rates in a corridor, raised its overnight borrowing and lending rates earlier this month by 50 basis points to 8.5 and 10.5 percent.
Certificates of deposit and treasury bills typically offer higher returns than the interbank market, and large central bank auctions usually tend to push rates higher as banks shun the interbank market in favour of government paper.
Five out of 11 banks contacted by Reuters reported overnight deals at rates between 9.4 and 9.7 percent, compared with rates between 9.3 and 9.75 on Sunday. Two banks said they dealt one-week money at 9.5 and 9.7 percent. By 1 pm local time (1100 GMT) the pound had strengthened to 5.7199 pounds to the dollar from Sunday's closing weighted average of 5.7205.
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