Dhaka, Bangladesh (BBN)- The interest rate on Bangladesh Government Treasury Bonds (BGTB) increased on Tuesday as commercial banks were not interested to buy longer term bonds with lower interest rates, treasury officials said.

The yield, generally known as coupon interest rate, of the 5-year BGTB rose to 7.80 percent on the day from 7.49 percent of the previous auction held on Sept. 15, according to auction results.

“Most of the commercial banks are not interested to invest their excess liquidity in long-term securities with lower interest rate,” a senior treasury official of a commercial bank said.
He also said the bankers want to shift their investment portfolios following increasing demand for fresh investment in different sectors including trade and agriculture.

Bidders offered BDT 5.853 billion for the bond at an auction, held at the central bank in Dhaka on the day, according to a Bangladesh Bank (BB), the country’s central bank, auction result, issued on the day.

“Of those, three bids amounting to total of BDT 870.1 million (including two non-competitive bids amounting to BDT 770.1 million) were accepted and BDT 3.629 billion was devolved on primary dealers,” the auction result said.

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

BBN/SS/SI/AD-21October09-1:16 am (BST)