Dhaka, Bangladesh (BBN) – The government is set to borrow BDT 7.0 billion from the market through issuing its five-year treasury bonds to finance budget deficit partly.
An auction of 5-Year Bangladesh Government Treasury Bonds (BGTB) will be held at the central bank on Tuesday to borrow the money from the participating PD (primary dealer) banks, officials said.
“The interest rate on the BGTB is unlikely to rise at today’s auction mainly due to excess liquidity with the banks,” a senior treasury official of a PD bank told BBN in Dhaka.
He also said more than BDT 15 billion was injected in the market on Sunday following retirement of different treasury bills.
The yield, generally known as coupon interest rate, of the 5-year BGTB rose to 5.91 per cent in the last auction, held on December 12 from 5.72 per cent of the previous auction, held on November 8, 2016.
Currently, five government bonds, having the tenures of 2-year, 5-year, 10-year, 15-year and 20-year, are being traded in the market.
Interested financial institutions and individual investors can take part in the auction through the PD banks of the five-year bonds of minimum BDT 100,000 denomination.
However, the bond-holders can receive coupon interest on the government-approved securities on a half-yearly basis from the date of issue of the bonds.