Nepal Rastra Bank to Hold Auction for Rs 10 Billion in Development Bonds

The Monetary Management Department of the Nepal Rastra Bank (NRB) has announced an auction of development bonds valued at Rs 10 billion, each with a maturity period of six years.

Qualified participants in this auction encompass banks, financial institutions, non-banking financial institutions, insurance companies, organizations, and Nepali citizens.

The online auction is slated for August 27, with bidding open until 3:00 pm.

The central bank will ascertain the cutoff interest rate by categorizing the interest rates proposed at the auction, ranging from the highest to the lowest bidder. This cutoff rate will be maintained as the final interest rate.

Bidders submitting bids below the established interest rate will also secure bonds at the same uniform interest rate. Interest payments will be made semi-annually, with accrued interest subject to applicable interest tax.

Purchasers have the option to acquire bonds with a minimum value of Rs 50,000. A substantial portion of the bonds, specifically 85 percent amounting to Rs 8.5 billion, will be available for competitive bidding, while the remaining 15 percent, equivalent to Rs 1.05 billion, will be allocated for non-competitive bidding.

It's noteworthy that the principal repayment for these bonds is scheduled for August 24, 2029.