Dhaka, Bangladesh (BBN)– The interest rates on the Bangladesh government security is likely to rise today (Tuesday) as banks are not interested to buy the instruments ahead of the Eid.
The cut off yield, generally known as interest rate, on 05-Year Bangladesh Government Treasury Bonds (BGTB) was 5.10 per cent in the last auction, held on February 14, 2017.
The government is set to borrow BDT 10 billion through issuing the BGTB on Tuesday to meet its budget deficit partly, officials said.
As per auction calendar, an auction of the 05-Year BGTB is scheduled to be held at the central bank headquarters in Dhaka on Tuesday in this connection.
“The interest rates on the long-term government security may rise today (Tuesday) due to the upcoming Eid-ul-Fitr festival and June closing,” a senior official treasury official of a leading private commercial bank told the BBN in Dhaka.
Most of the commercial banks are not interested to invest their excess funds in the long-term government securities to avert any possible liquidity pressure before the upcoming Eid-ul-Fitr festival, he explained.
Currently, three treasury bills (T-bills) are being transacted through auctions to adjust government borrowings from the banking system. The T-bills have 91-day, 182-day and 364-day maturity periods.
Furthermore, five government bonds with tenures of 02, 05, 10, 15 and 20 years respectively are traded on the money market.