Cairo: Egypt's central bank moved 5 billion Egyptian pounds ($854 million, Dh3.1 billion) of cash into the financial system as depositors gain access to their savings for the first time in more than a week and the government seeks to resume debt sales.

The central bank used military cargo planes to bring in the cash, Governor Farouk Al Okdah told state-run television. The bank, which has $36 billion in reserves and guarantees deposits, said last week that customers can withdraw up to 50,000 Egyptian pounds and $10,000 a day and lenders had enough liquidity to meet all demands.

"The central bank took a good step in saying something publicly to try to reassure depositors," Ann Wyman, London-based head of emerging markets research at Nomura Holding, said in an e-mail February 3.

Yields on Egypt's treasury bills may surge about 30 per cent, according to Shahinaz Foda, the head of treasury at BNP Paribas Egypt. The government plans to sell 15 billion pounds in notes tomorrow after cancelling last week's auction as protests against President Hosni Mubarak intensified. Credit Agricole CIB expects the pound to slump 20 per cent in the "short term." The currency's three-month non-deliverable forwards rose to a record last week, suggesting the currency may fall more than 7 per cent against the dollar.

Treasury bills

The finance ministry plans to hold a meeting with the central bank and primary dealers and will issue a statement later today, Hani Khallaf, the finance minister's public debt adviser said in a telephone interview last week. Egypt's stock exchange will "likely" open this week with new rules to limit the expected drop in the market, communications manager Hisham Turk said yesterday. The bourse has been shut since January 30.

It postponed the sale of 4 billion pounds planned for January 30 after raising 2.5 billion pounds on January 27. The average yields on the sale of 182-day bills jumped 40 basis points to a one-year high of 10.6 percent, according to data compiled by Bloomberg.

The central bank plans to auction 8 billion pounds in 91-day bills, 5 billion pounds in 182-day bills and 2 billion pounds in 273-day bills, according to data compiled by Bloomberg. The bank will announce the results February 8, Deputy Governor Hisham Ramez said on Saturday.

Yields on three-month treasury bills should be "not less than" 12.5 per cent in upcoming auctions, up from 9.5 per cent last month, Cairo-based Foda said by phone on Saturday. The yield on the one-year bills may climb to 14 per cent from 10.6 per cent, she said.

Banks: Back in business

A steady stream of employees flowed into Cairo's financial district and customers queued to access their accounts on Sunday, the first day for the country's banks to open after a week-long closure due to political protests.

Armoured personnel carriers stood guard at intersections where soldiers had erected barriers, as buses dropped employees off at banks.

"We have to have some order around here. People are anxious to get paid and pull money out. It has been almost two weeks and life is at a standstill," said Metwali Sha'ban, a volunteer.

— Reuters