The central bank is issuing development bonds worth Rs 3 billion this
week under its calendar of domestic borrowing.
The government has – in the budget for the current fiscal year
2013-14 – planned to borrow Rs 44 billion from the domestic market to finance
the budget deficit.
Some 70 per cent of the five-year Rs 3 billion-bond will be
auctioned to banks and financial institutions, whereas the remaining has been
separated for non-depository institutions like insurance companies and
state-owned firms like Employees Provident Fund (EPF) and Citizen Investment Trust (CIT).
The budget has also planned to issue different types of bonds
worth Rs 30 billion and treasury bills worth Rs 14 billion, making it a total
of Rs 44 billion, according to the government's fiscal policy.
The government will – for
the first time – allow the market to determine the interest rate of the bonds.
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