Dhaka, Bangladesh (BBN) – The interest rate on Bangladesh Government Treasury Bonds (BGTB) dropped further on Tuesday as commercial banks rushed to offer their bids in auction, treasury officials said.
The yield, generally known as coupon interest rate, of the 10-year BGTB fell to 8.49 per cent on the day from 8.74 per cent of the previous auction, held on August 4 last.
Besides, the yield of 10-year BGTB came down to 9.40 per cent on July 7 from 10.05 per cent of the previous auction, held on June 7 last, according to the central bank statistics.
“Some banks, mostly primary dealer (PD) banks, have quoted lower interest rates to invest their excess liquidity in the government-approved securities to minimize their cost of funds,” a senior treasury official of a commercial bank said.
He also added non-PD banks are not interested to participate in the auction bids ahead of the Eid festival.
The overall excess liquidity with the commercial banks stood at BDT 347 billion in June last, registering a growth of over 165 per cent compared to the corresponding period of the previous calendar year, according to the central bank.
The demand for such securities has risen mainly due to the lower interest rates on call money in the inter-bank market, the treasury official added.
The call money rate ranged between 0.10 per cent and 3.50 per cent on the day, unchanged at the previous level. But most of the deals were made at rates between 0.15 per cent and 0.20 per cent on the day, market operators said.
Currently, four government bonds – 5-year, 10-year, 15-year and 20-year -are being traded in the market.
BBN/SS/SI/AD-02September09-2:21 am (BST)
