Yield rises on 3-year Egypt T-bonds, 5-year offer cancelled

CAIRO, Dec 31 (Reuters) - The average yield on 500 million Egyptian pounds ($79 million) of three-year treasury bonds rose at auction on Monday, and the central bank cut back the amount offered as investors fled Egyptian pounds on devaluation fears.

The central bank said it also cancelled an offer of 1 billion pounds worth of five-year T-bonds.

The central bank introduced a new currency regime on Sunday, and in two days the long-stable pound has slipped 3 percent against the U.S. dollar, with more weakening expected in the days ahead.

"All yields for all T-bills and bonds jumped this week on the back of the devaluation, a squeeze on liquidity and end-of-year reasons," said Khalid Bawab, head of fixed income at EFG Hermes Asset Management.

"The end of the year is usually the season for repatriation of funds," he added.

The yield on the three-year bond rose to 14.387 percent from 13.89 percent at the previous issue on Dec. 18. The central bank had offered 1 billion pounds worth.

The central bank also sold 500 million pounds of 10-year bonds, the same amount it had offered, at an average yield of 16.322 percent.

Settlement for the bonds will take place on Jan. 1. The central bank sells the bonds on behalf of the finance ministry. ($1 = 6.355 Egyptian pounds)

(Reporting by Patrick Werr; editing by Stephen Nisbet)