Govt to issue bonds, savings certificates

The government will issue foreign employment bonds, national savings certificates and development bonds worth Rs 7.25 billion this month.

According to Nepal Rastra Bank (NRB), national savings certificates worth Rs 1 billion, foreign employment bond worth Rs 250 million and development bonds worth Rs 6 billion will be issued on Dec 9, 16 and 19 respectively.

While the initial two bonds will mature in five years, development bonds will have a seven-year maturity period.

Banks and financial institutions, contractual savings institutions and individuals can subscribe to the development bonds while the national savings certificates are targeted at individual citizens and non-profit organizations.

Foreign employment bonds are targeted at migrant workers. While the interest rate for the development bonds will be fixed through competitive bidding, the government has fixed the interest rate for the national savings certificate at 8 percent. The interest on foreign employment bonds has been fixed 9 percent.

With the government preparing to issue foreign employment bonds worth Rs 1 billion this fiscal, they will be issued under the ratio of 25:50:25. The government aims to issue development bonds worth Rs 26 billion, national saving certificates worth Rs 4 billion this fiscal.

The government has made an early start in raising internal loans this year despite having abundant idle funds in its treasury.

According to an NRB official, the government has Rs 40 billion in its treasury.

The government had issued development bonds worth Rs 3 billion in mid-November which was oversubscribed eightfold.