After facing a big decline in the last fiscal year (FY21), yields of Bangladesh government’s long-term bonds are likely to drop further in the current year.
World Government Bond, a virtual platform that works on the international bond market, made the forecast.
According to the forecast, the yield of 5-year treasury bond may decline to 3.65 per cent by the end of December this year which was 3.95 per cent at the end of July.
The yield of 10-year treasury bond, considered as the benchmark of long-term bonds globally, is also expected to come down to 4.90 per cent by the end of 2021. The quoted yield of the bond was 5.48 per cent at the end of last July.
A bond's yield usually refers to the expected earnings generated and realised on a fixed-income investment over a particular period of time and is generally expressed as a percentage or interest rate.
Yield of 2-year treasury bond is expected to come down to 1.57 per cent by the end of December 2021 which was 2.35 per cent at the end of July this year.
The weighted average yield of 2-year treasury bond was 6.39 per cent in July 2020. It gradually came down to 2.44 per cent in mid-June, according to Bangladesh Bank statistics.
In Bangladesh, treasury bonds are long-term debt instruments of the government to finance the budget deficit.
The weighted average yields on 5-year, 10-year, 15-year and 20-year treasury bonds stood at 3.97 per cent, 5.68 per cent, 6.04 per cent and 6.60 per cent respectively at the end of May this year.
World Government Bond also forecasted that yield of 15-year treasury bond may drop to 5.06 per cent by the end of December 2021 which was 5.89 per cent at the end of last month.
Again, 20-year treasury bond is likely to generate 5.25 per cent yield by the end of this year against 6.13 per cent of end-July.
World Government Bond provides daily updates of government bonds across the world along with near-term forecasts of bond yields.
|
Bangladesh Treasury Bonds |
Yield (Quoted) July 31, 2021 |
Yield (Forecast) December 31, 2021 |
|
2-year t-bond |
2.35% |
1.57% |
|
5-year t-bond |
3.95% |
3.65% |
|
10-year t-bond |
5.48% |
4.90% |
|
15-year t-bond |
5.89% |
5.06% |
|
20-year t-bond |
6.14% |
5.25% |
Source: www.worldgovernmentbonds.com
