Treasury bond yield rate up ahead of Eid - Share market analysis of dhaka stock exchange, Bangladesh

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15 June, 2017 09:55 AM Source: The Financial Express Bangladesh
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The interest rate on the Bangladesh Government Treasury Bond (BGTB) bucked up Tuesday for less interest of commercial banks in buying the instrument ahead of Eid festival.

The cutoff yield, generally known as interest rate, on 05-Year BGTB rose to 5.83 per cent on the day from 5.10 per cent of the previous auction held on February 14, 2017.

According to officials, the government borrowed Tk 10 billion through re-issuing the BGTB at an auction held at the central bank headquarters in Dhaka to meet its budget deficit partly.

"The interest rate on the BGTB has been fixed in line with the market requirement," a senior official of the Bangladesh Bank (BB) told the FE.

Also, the central banker hinted, the interest rates on other BGTBs may rise ahead of the Eid festival.

The auctions of 10-Year BGTB, 15-Year BGTB and 20-Year BGTB are scheduled to take place at the BB headquarters in the capital on June 20 and June 22 respectively, according to the ongoing auction calendar.

The government is set to borrow Tk 20 billion more by using the BGTBs.

Earlier on June 06, the cutoff yield on the 02-year BGTB rose to 5.05 per cent from 4.44 per cent of the previous auction held on March 01 last. Talking to the FE, a senior treasury official of a leading private commercial bank said bigger amount of issue at an action helped in increasing the interest rate on the long-term government security.

Besides, some banks are not interested to invest their excess funds in the securities to avert any possible liquidity pressure before the Eid-ul-Fitr festival, the private banker explained.

Currently, three treasury bills (T-bills) are being transacted through auction 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.


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