The government has relaxed regulations, allowing foreigners to invest in its treasury bonds by using Non-Resident Investor's Taka Account (NITA), officials said.
Under the relaxations, the purchase is made with funds of a Non-Resident Foreign Currency Account (NFCA) or a NITA with a bank in Bangladesh in the name of the purchaser.
The ministry of finance (MoF) issued a notification Tuesday and asked authorities concerned for taking necessary actions in this connection.
"We've allowed NITA to purchase the Bangladesh Government Treasury Bonds (BGTBs) to encourage foreign investors to invest in the securities," a senior official of the Bangladesh Bank (BB) told the FE.
He also said the government has relaxed the regulations in line with the foreign investors' desire.
"We expect that it will help infuse dynamism into the country's secondary securities market through increasing investment in the BGTBs," the central banker noted.
The MoF has allowed foreign nationals to invest in the treasury bonds using NITA after withdrawal of the one-year lock-in period.
The commercial banks, particularly the foreign commercial ones, are now working to attract their foreign clients to invest in the Bangladesh bond market.
On April 11 last year, the government withdrew the lock-in provision on all bonds for both non-resident Bangladeshis (NRBs) and foreign nationals to bring dynamism into the secondary securities market.
At present, the BGTBs, purchased by a non-resident, may freely be resold to a resident in Bangladesh or to another non-resident.
Earlier, the BGTBs, purchased by a non-resident, could not be resold to a resident in Bangladesh within one year of purchase.
Currently, five government treasury bonds, with duration of two, five, ten, fifteen and twenty years, are being traded in the market.
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