Dhaka, Bangladesh (BBN)- The government borrowed BDT 51.97 billion instead of BDT 43 billion on Tuesday through issuing two-type of treasury bonds, officials said.
More than BDT 49.26 billion was borrowed against BDT 40 billion of pre-auction target through issuing Two-Year BGTBs on the day to meet its budget deficit partly.
Besides, the government borrowed more than BDT 2.71 billion instead of BDT 3.0 billion through issuing of Three-Year Floating Rate Treasury Bonds (FRTBs) on the same ground.
The FRTB is a bond whose coupon is determined by adding spread with benchmark 91 days Bangladesh Compounded Rate (BCR).
The coupon was fixed at 13.26 per cent on the FRTBs on the day while BCR was 11.76 per cent and spread was 1.50 per cent.
The BCR is a daily rate based on the cut-off yield of 91-Day Treasury Bills (T-bills) auction. This is a reference rate which is primarily used to set the rate of floating rate instruments of the government.
On the other hand, the yield on Two-Year BGTBs fell slightly on the day as banks expressed willingness to invest funds in the securities.
The cut off yield, generally known as interest rate, on the BGTBs came down to 12.20 per cent in the immediate past auction from 12.24 per cent earlier.
Currently, five government bonds, with tenures of two, five, 10, 15 and 20 years respectively, are traded on the market.
Besides, four treasury bills (T-bills) are transacted through auction to adjust government borrowings from the banking system.
The T-bills have 14-day, 91-day, 182-day and 364-day maturity periods.
BBN/SSR/AD