Dhaka, Bangladesh (BBN)– The interest rate on Bangladesh Government Treasury Bonds (BGTB) increased slightly on 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 20-Year BGTB rose to 9.2500 per cent on the day from 9.2300 per cent of the previous auction, held on August 24 this year, according to auction results.

 “We expect that the overall interest rate may rise in the near future in line with the central bank’s latest indication and then the interest rate on the long-term security will increase,” a senior treasury official of a leading private commercial bank said.

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 per cent on August 19 this year from 4.50 per cent while reverse repo auction was increased to 3.50 per cent from 2.50 per cent.

Currently, four government bonds – 5-year, 10-year, 15-year and 20-year – are being traded in the market.

BBN/ANS/SSR-28Sept10-11:16 pm (BST)