The government has sharply cut the interest rate on the short-term government securities over the last few months as scheduled banks with huge idle fund continue to submit a large number of bids in the auction of treasury bills and T-bonds with a view to invest their fund.
The banks are now holding huge amount of idle fund due to a lower investment trend in the private sector amid political unrest which compels the banks to invest in the T-bills and T-bonds with lower rate of interest, said officials of Bangladesh Bank.
According to the latest BB data, the cut of yield (interest rate) of all kinds of short-term T-bills declined in the last month while the rate of interest of 2-year and 5-year T-bond decreased.
The rate of interest on 91-day, 182-day and 364-day declined to 7.41 per cent, 8.22 per cent and 9.25 per cent respectively in December 2013 from 9.24 per cent, 10.62 per cent and11.12 per cent in December 2012.
The rate of interest on 5-year T-bond declined to 11.30 per cent in December 2013 from 11.52 per cent in the same month a year ago.
The rate of interest on 2-year T-bond also declined to 10.03 per cent in December from 10.94 per cent in May 2013. The BB reintroduced the 2-year T-bond in May 2013.
The BB data showed that the rate of interest of the central bank’s owned securities of 30-day BB bill went down to 7.09 per cent in December 2013 from 8.94 per cent in the corresponding month of 2012.
-With New Age input
