Dhaka, Bangladesh (BBN)- The interest rate on Bangladesh Government Treasury Bonds (BGTB) increased slightly on Tuesday, as commercial banks are not interested in buying the bonds with a lower yield, treasury officials said.
The yield, generally known as the coupon interest rate, on the 15-Year BGTB rose to 8.7400 percent on the day from 8.6900 percent at the previous auction, held on Dec. 8, 2009, according to auction results.
"The yield of the BGTB has been fixed in line with the market demand," a senior official of the Bangladesh Bank (BB) said.
Bidders offered BDT 1.42 billion for the bond at an auction, held at the central bank in Dhaka on the day, the central bank said in its auction results.
Of those, one bid amounting to BDT 70 million was accepted and BDT 930 million was devolved on primary dealers, according to the auction result.
"Most of the banks expect that the demand for fresh investment would go up in the near future and then the interest rate on the long-term security would increase further," a senior treasury official of a private commercial bank told BBN in the capital, Dhaka.
Currently, four government bonds - 5-year, 10-year, 15-year and 20-year - are being traded in the market.
BBN/SS/SI/AD-13January10-10:30 am (BST)