CAIRO, Sept 25 (Reuters) - Average yields on Egypt’s five- and 10-year treasury bonds dropped sharply at an auction on Monday, central bank data showed, reflecting increased foreign currency inflows..
Both the five-year and 10-year yield dropped to 15.000 percent from 16.150 percent at the last similar auction on Sept 11.
Appetite for Egypt’s domestic debt increased after the central bank floated the pound currency and hiked key interest rates in November, but average yields began a trend of sharply dropping in recent weeks as foreign currency liquidity improved.
Hany Farahat, senior economist at Cairo-based CI Capital, attributed the improved liquidity to higher foreign currency inflows in recent months.
Egypt’s foreign reserves surged above their pre-2011 uprising levels in July, reaching $36.036 billion. Foreign reserves had run low following the 2011 uprising that drove tourists and foreign investors away, two main sources of foreign currency. (Reporting by Arwa Gaballa Editing by Jeremy Gaunt.)