“Treasury bills” an alternative to high-yield certificates

Banks operating in the local market tended to issue savings certificates with a return of 18.5%, after they stopped selling the 20 and 22.5 and 25% certificates offered last January.

Those wishing can obtain an alternative to high-yield certificates, with a return of 22.1% in advance, by investing in Egyptian treasury bills.

Treasury bills  

The Central Bank of Egypt, on behalf of the Ministry of Finance, offered treasury bills totaling 34 billion pounds, for issuance today, with 3-month deadlines at a value of 13 billion pounds, and 21 billion pounds for 9-month bills, to spend on items of the state’s general budget.

Raise interest

The Central Bank of Egypt agreed to raise interest rates on one-year treasury bills to 22.126%, and to raise interest on 9 month bills to 22.100%, which is an attractive return for many who wish to invest their savings.

Banks, led by the National Bank of Egypt, offer the return of treasury bills in advance upon acceptance by the Central Bank of Egypt.

Although 20% tax is deducted on the return at the end of the treasury bills maturity period, obtaining the return in advance makes it possible to invest this return in buying stocks or gold, to achieve profits from it, by the time the treasury bills mature.

The Monetary Policy Committee of the Central Bank of Egypt, in its last meeting in early February, fixed interest rates at the levels of last December, at 16.25% for deposits and 17.25% for lending.

In an indication that it does not need to raise the interest rate, and therefore banks are not forced to issue certificates with a high return in the near term.