Interest rate of 5-year treasury bonds unchanged
Friday, 18 December 2009
FE Report
The interest rate on 5-year Bangladesh Government Treasury Bonds (BGTB) remained unchanged Tuesday, as commercial banks were not interested to invest their funds for the existing yield, treasury officials said.
The yield, generally known as coupon interest rate, on the 5-year BGTB was 7.80 per cent on the day, unchanged from the previous auction, held on November 17, according to auction results.
"The customers of the commercial banks are not interested to invest their funds, because they have another option, to invest their funds in National Investment Bond (NIB) at 8.50 per cent with three years maturity," a senior treasury official of a commercial bank told the FE.
He also said the treasury officials expect the future interest rate of the government securities to head upward. "So most of the banks are not interested to lock in their funds for the current lower yield," he added.
Fifteen bidders offered bids amounting to Tk 5.140 billion for the risk-free government bond. But four bids amounting to Tk 1.628 billion were accepted and bonds worth Tk 2.872 billion were devolved on primary dealers, the Bangladesh Bank (BB) said in its auction result.
The BB earlier selected 13 PDs - 10 commercial banks and three non-banking financial institutions (NBFIs) - to handle the government securities in the secondary market.
Currently, four government bonds - 5-year, 10-year, 15-year and 20-year - are being traded in the markets.
The interest rate on 5-year Bangladesh Government Treasury Bonds (BGTB) remained unchanged Tuesday, as commercial banks were not interested to invest their funds for the existing yield, treasury officials said.
The yield, generally known as coupon interest rate, on the 5-year BGTB was 7.80 per cent on the day, unchanged from the previous auction, held on November 17, according to auction results.
"The customers of the commercial banks are not interested to invest their funds, because they have another option, to invest their funds in National Investment Bond (NIB) at 8.50 per cent with three years maturity," a senior treasury official of a commercial bank told the FE.
He also said the treasury officials expect the future interest rate of the government securities to head upward. "So most of the banks are not interested to lock in their funds for the current lower yield," he added.
Fifteen bidders offered bids amounting to Tk 5.140 billion for the risk-free government bond. But four bids amounting to Tk 1.628 billion were accepted and bonds worth Tk 2.872 billion were devolved on primary dealers, the Bangladesh Bank (BB) said in its auction result.
The BB earlier selected 13 PDs - 10 commercial banks and three non-banking financial institutions (NBFIs) - to handle the government securities in the secondary market.
Currently, four government bonds - 5-year, 10-year, 15-year and 20-year - are being traded in the markets.