Today Egypt came to market in an attempt to pull a Geithner, and fund $2.52 billion worth of deficit spending at the expense of external investors: a privilege for which it was prepared to pay a lot of money. And even despite ultimately paying a rate of 10.972% that even Portugal would cower in fear and shame from, the Egyptian Central Bank was forced to reduce the size of its combined 15 billion Bill offering by over 2 billion Egyptian pounds as interest just wasn't there.
Egypt's central bank reduced the size of its 15 billion Egyptian pound ($2.52 billion) Treasury bill offering on Monday, a banker said.
The bank had been offering 8 billion Egyptian pounds in 91-day bills, but was now only selling 7 billion pounds worth, the banker said.
Other maturities were also reduced, but the banker did not say by how much. The central bank was also offering 5 billion pounds in 182-day bills and 2 billion pounds in 273-day bills.
The average yield of 91-day bills sold on Monday was about 11 percent, up from 9.5 percent at the last sale before political unrest closed the banking system for a week, the banker said.
And now that Egyptian central banks are finally back in operation, even if on a very truncated schedule, we will be keeping a close eye on the total amount of deposits in circulation. After all with everyone printing money, the E(gyptian)CB will be stupid to pretend it is monetarily prudent. And what is a 20% drop in one's currency between friends. At last check one dollar was worth 5.952 Egyptian pounds. It won't be worth that for long.