Dhaka, Bangladesh (BBN)- The government is going to issue sovereign bonds worth at least US$500 million in the fiscal year (FY) 2012-13, officials said.
The government may release sovereign bonds the next fiscal year aiming to attract more foreign investment, a finance ministry official said.
"We'll issue sovereign bond in an appropriate time when all the macroeconomic features, everything to be looked propitious, but we'll obviously go for sovereign bond," Finance Minister AMA Muhith said while addressing a meeting on repackaging, marketing and determining possible strategy of security bonds held at the Ministry of Finance in Dhaka on Tuesday.
The ministry officials said there is a need to raise the GDP-investment ratio to 32 percent from the existing 24 per cent in order to gain 8 per cent GDP growth by the year 2016-17.
According to Finance Ministry estimation, the investment deficit would reach around BDT 979 billion by fiscal year 2014-15. To meet this investment deficit, a major chunk should have to come from foreign currencies to ensure infrastructural development, facing the risks of balance of payment as well as ensuring sufficient budget support.
A technical committee has been formed with Additional Secretary of the finance ministry Syed Manjurul Islam as the head for releasing the sovereign bonds and making the existing bonds more attractive.
The government has decided to increase the rate of interest on existing wage earners development bonds by 0.20 percentage point.
Currently, the rate of interest on wage earners' bonds is 11.80 percent. The finance minister said the rate will be increased to 12 percent from next year.
Now the foreign currency bonds are issued only in the US dollar. Decision has been taken to release the bonds in the pound sterling and euro also.
BBN/SSR/AD-16May12-9:30 am (BST)
