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 the coupon interest rate, on the 5-Year BGTB rose to 7.8100 percent on the day from 7.8000 percent at the previous auction, held on Dec. 15, 2009, according to auction results.
Bidders offered BDT 2.38 billion for the bond at an auction, held at the central bank in Dhaka on the day, the BB said in its auction result.
Of those, six bids amounting to BDT 660 million were accepted and BDT 1.34 billion was devolved on primary dealers, the central bank of Bangladesh said.
"Most of the commercial banks are not interested to invest their excess liquidity in long-term securities with lower interest rate. They want to shift their investment portfolios following increasing demand for fresh investment in different sectors including trade and agriculture," a senior treasury official of a private commercial bank said told BBN in Dhaka on Wednesday.
Currently, four government bonds - 5-year, 10-year, 15-year and 20-year - are being traded in the market.
BBN/SS/SI/AD-20January10-11:55 am (BST)