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Sunday, 14 October 2018

CBE enters USD 3.8 bn repurchase transaction with int’l banks

** #2 Central bank enters USD 3.8 bn repo agreement with int’l banks: The central bank is entering into a new USD 3.8 bn repurchase transaction with a consortium of global banks, allowing the CBE to “boost its foreign-currency stockpile at a time when an emerging-market selloff is spooking investors.”

The details: Consortium members including Citigroup, Credit Suisse, Deutsche Bank, First Abu Dhabi Bank, HSBC, ICBC Standard Bank, JP Morgan Securities, Natixis and Nomura International. “The repurchase transaction will settle on 19 November 2018, following the CBE repayment of the total sum of USD 3.1 bn, on 15 November 2018, honoring the terms of the previous repurchase transaction transacted in November 2017, with a consortium of international banks,” the CBE said in a statement on Thursday (pdf). “The transaction aims to achieve CBE’s objective of enhancing its liability management by extending the duration of its debt structure,” the statement said.

The transaction is a vote of confidence, the CBE writes, reflecting “the continued strong affirmation and vote of confidence by the international market in the success of the home-grown economic reform program during the past years.”

Background: The USD 3.1 bn agreement in 2017 was an extension to the USD 2 bn in repo funding that was secured in November 2016 against USD-denominated sovereign bonds as part of funding required to secure the USD 12 bn IMF Extended Fund Facility. Bloomberg and Reuters both have the story.

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