Government Bond Interest Rates Decrease, Treasury Bill Rates Hit Lowest Point of the Year
The interest rates of government bonds have recently witnessed a gradual decrease, while the interest rates of treasury bills have reached their lowest point this year. This decline in interest rates can be attributed to the surplus liquidity in banks and the Nepal Rastra Bank's (NRB) decision to lower bank rates.
Previously, the interest rates were set at 6.68 percent for 28 days, 8.13 percent for 91 days, 8.04 percent for 182 days, and 8.14 percent for 364 days.
However, this year has seen a significant drop in interest rates. The rate for 28-day treasury bills has plummeted to 4.29 percent, marking the lowest rate of the year. Similarly, the interest rate for 91-day treasury bills now stands at 7.03 percent. Meanwhile, the rates for 182-day and 364-day treasury bills have been maintained at 7.02 percent and 7.11 percent, respectively.
The decline in interest rates can be attributed to the increased liquidity in the banking sector, which has prompted the NRB to lower bank rates. This move aims to stimulate economic growth and encourage borrowing activities.
Recently, Governor of NRB Maha Prasad Adhikari was quoted as conforming that the liquidity in banks had improved.
The reduced interest rates on government bonds and treasury bills provide an opportunity for investors and borrowers alike. Investors seeking relatively safe investment options may find government bonds and treasury bills less attractive due to the lower interest rates. On the other hand, borrowers can benefit from the reduced cost of borrowing, which may boost economic activities and investment in the country.
It remains to be seen how these decreased interest rates will impact the overall economy and the financial market. Market participants and economists will closely monitor these developments to gauge the effects on various sectors and make informed decisions regarding investments and financial strategies.
