Interest rate on BGTB increases slightly

The interest rate on Bangladesh Government Treasury Bonds (BGTB) increased slightly Tuesday, as primary dealers were not interested in buying the bonds with a lower interest rate, treasury officials said. The yield, generally known as coupon interest rate, on 15-Year BGTB rose to 9.3000 per cent on the day from 9.2000 per cent of the previous auction held on March 8 last. "The yield of the BGTB has been fixed in line with the market demand," a senior official of the Bangladesh Bank (BB) told the FE without elaborating. Bidders offered Tk 2.50 billion for the bond at an auction held at the central bank on the day, the BB said in its auction result. "All received bids were accepted. The coupon rate of the accepted bids was 9.3000 percent per annum," it added. "Most of the primary dealer (PD) banks and non-banking financial institutions (NBFIs) expect that the existing upward trend of interest rate may continue in the near future to curb the inflationary pressure on the economy," a senior treasury official of a PD bank told the FE. He also said the BB has already given signal to the market through using its monetary tools including cash reserve requirement (CRR), repurchase agreement (repo) and reserve repo rates. The central bank is now allowing only PDs to submit bids in the primary auction of the government securities for April-June period of this calendar year. Non-PD banks and financial institutions are now taking part in the auction only through the PDs. The central bank of Bangladesh earlier selected 15 PDs -- 12 banks and three NBFIs -- to handle government-approved securities in the secondary market. Currently, four government bonds - 5-year, 10-year, 15-year and 20-year - are being traded in the market.