In the last FY, 28 days T-Bills raked 11.69 percent rate while 91 days T-Bills raked 12 percent discount rate however, T-Bills are being renewed with 6 percent discount rate this year.
In recent days, the discount rate of T-Bills is continuously declining. T-Bills is short term debt instrument for the government; thus, the falling rate will lower the interest burden for the government. The government get to borrow funds in just one-digit rate. However, the declining rate will cut off income for banks as their earning from interest of T-Bills will fall.
Nepal Rastra Bank (NRB) in order to collect internal debt renewed T-Bills worth Rs 20 billion on Monday. The central bank set discount rate of 6.12 percent to 6.43 percent for renewal of T-Bills.
The average rate of 28 days T-Bills has been set at 6.12 percent, of 91 days at Rs 6.16 percent, 182 days at 6.40 percent and 364 days at Rs 6.43 percent.
It shows that BFIs which purchased the T-Bills in higher rate has renewed them in lower rate.
Currently, BFIs have excess liquidity. Moreover, NRB has brought down policy rates to cut interest rates which has brought down short-term interest rates.
As per NRB data, the government collected internal loans of Rs 457 billion through T-Bills. Similarly, it collected internal debt of Rs 656 billion through development bonds, Rs 10 billion through citizen saving bond and Rs 170 million through foreign employment bond.
Out of all T-Bills issued by the government, 79.23 percent i.e. Rs 353 billion is purchased by commercial banks while 8.14 percent i.e. Rs 25 billion is purchased by development banks.
