Dhaka, Bangladesh (BBN) – The interest rate on Bangladesh Government Treasury Bonds (BGTB) increased slightly Tuesday, as commercial banks are not interested in buying the bonds with a lower yield, treasury officials said.
The yield, generally known as coupon interest rate, on 15-Year BGTB rose to 8.9500 per cent on the day from 8.9200 per cent of the previous auction, held on September 14 last.
Bidders offered BDT 1.915 billion for the bonds at an auction, held at the central bank on the day, the Bangladesh Bank (BB) said in its auction result.
Of those, four bids amounting to BDT 520 million were accepted and BDT 980 million was devolved on primary dealers (PDs), according to the auction result.
The central bank of Bangladesh earlier selected 15 PDs – 12 banks and three non-banking financial institutions – to handle government securities in the secondary market.
“Most of the banks expect that the overall interest rate may increase in the near future in line with the central bank’s latest indications,” a senior treasury official of a commercial bank told BBN in Dhaka.
The central bank of Bangladesh has increased its policy interest rate by 1.0 percentage point aiming to curb inflationary pressures on economy.
The interest rate on repurchase agreement (repo) auction was re-fixed at 5.50 percent on August 19 this year from 4.50 percent while reverse repo auction was increased to 3.50 percent from 2.50 percent.
Currently, four government bonds – 5-year, 10-year, 15-year and 20-year – are being traded in the market.
BBN/SSR/SI-12Oct10-8:55 pm (BST)