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Dhaka Tribune

Tk 7.2 bn 2-year bonds soon

Update : 16 Apr 2013, 01:28 PM

 

Bangladesh Bank (BB) will soon issue taka 7.2 billion two-year bonds to attract more investment in the financial market.

With this new bond, there will be five types of bonds with 2, 5, 10, 15 and 20 years of maturity date.

The central bank in a directive issued yesterday (Wednesday) to all banks and financial institutions said the government's decision to introduce two-year bonds, lifting of one-year lock-in on selling of such bonds and re-issuance of the bonds would be implemented immediately.

The finance ministry issued a notification last week saying that the government decided to introduce the two-year bond and withdraw the lock-in condition on investment in such bonds by foreign nationals.

The notification mentioned that the non-resident buyers "can freely" resale their bonds to residents in Bangladesh or to non- residents. It further said the government would also reissue the existing bonds by auction for additional amount. The auction bid can be submitted online besides the present manual submission system.

A BB official said banks and financial institutions would use their additional liquidity to purchase the bonds to get good return. Currently, the rate of return on investment in all types of bond is around 12.50 per cent.

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