Dhaka, Bangladesh (BBN) - The yield on Two-Year BGTBs is likely to rise today as banks may express their unwillingness to invest funds in the securities.
The cut off yield, generally known as interest rate, on the BGTBs came down to 2.20 per cent in the immediate past auction from 12.24 per cent earlier.
The government is set to borrow BDT 40 billion through issuing the BGTBs on Tuesday to meet its budget deficit partly.
Besides, the government will borrow BDT 3.0 billion as per announcement on the day through issuing Three-Year Floating Rate Treasury Bonds (FRTBs).
The FRTB is a bond whose coupon is determined by adding spread with benchmark 91 days Bangladesh Compounded Rate (BCR).
The BCR is a daily rate based on the cut-off yield of 91-Day Treasury Bills (T-bills) auction. This is a reference rate which is primarily used to set the rate of floating rate instruments of the government.
Currently, five government bonds, with tenures of two, five, 10, 15 and 20 years respectively, are traded on the market.
Besides, four treasury bills (T-bills) are transacted through auction to adjust government borrowings from the banking system.
The T-bills have 14-day, 91-day, 182-day and 364-day maturity periods.
BBN/SSR/AD