Monday’s t-bond auction emerges empty-handed: The government declined all bids in Monday’s auction of local currency t-bonds, Reuters reports, citing unnamed bankers. The government was reportedly reluctant to meet the high interest rates demanded by investors.

Remember: The Central Bank of Egypt (CBE) took EGP 2.5 bn worth of three-year bonds and EGP 250 mn of five-year bonds to auction on Monday in its first bond sale this year, which came on the heels of the CBE’s decision to enact a bumper 600-bps rate hike and float the EGP last week.

How big was the ask? Investor bids reportedly penciled in rates of 28-31%, a range at which the ministry “was not willing to take on [the] bonds,” one banker told Reuters.

T-bills have had better luck: The central bank on Sunday sold EGP 94.4 bn worth of nine-month t-bills — almost 4x its target EGP 25 bn — and EGP 25 bn worth of three-month t-bills. The central bank also raised EGP 102 bn from one-year and six-month bills last Thursday — EGP 40.7 bn of which came from foreign investors whose confidence was reignited in Egypt post float.

We’ve seen these dynamics before: Investors have been loving Egypt’s short-term debt instruments post-float and their confidence was affirmed after JPMorgan and Citigroup recommended buying one-year EGP t-bills. Higher pricing on longer-term instruments generally reflects investors’ views of risk on that time horizon — but can also simply be a case of investors waiting to lock in better returns by seeing whether they can bid up the yield.

CORRECTION: In yesterday’s issue of EnterpriseAM Egypt, we mistakenly reported that the Central Bank of Egypt auctioned off three-year t-bonds worth EGP 28 mn on Sunday. The auction cited was from 2023. The story has been amended on our website.

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