KATHMANDU, DEC 25 -
The government’s National Saving Certificates (NSC) have met with lukewarm investor response, especially from individual buyers who subscribed debt instrument worth Rs 700 million out of the allocated Rs 800.
However, social organisations had over subscribed NSC by Rs 250 million on a single day on Monday. The government had allocated NSCs worth Rs 800 million for individuals and Rs 200 million for the non-profit making social organisations.
Although subscription was opened for two days until Tuesday, the central bank
stopped taking in applications early morning on Tuesday after there were over subscription of Rs 450 million allocated to NSCs.
The government had issued NSCs on December 10, offering an interest rate of 8 percent. A senior NRB official said that individuals were disinterested to invest on the government’s debt instrument due to higher interest rates elsewhere, including at the financial institutions and cooperatives.
“The government also cannot offer more as long as there are options for getting loans at lower interest rate,” the official said.
The government had fixed a competitive interest rate of 3.25 percent when it issued development bond through competitive bidding in November.
The central bank official also believe the NRB’s decision not to allow insurance companies and pension funds such as Employees’ Provident Fund and Citizen Investment Trust this time around to subscribe to NSCs also resulted in under subscription of the debt instrument.
The undersubscribed portion of the NSCs is likely to be transferred to other type of debt instruments such as treasury bills and development bonds, the official said.
Source: The Kathmandu Post
The government’s National Saving Certificates (NSC) have met with lukewarm investor response, especially from individual buyers who subscribed debt instrument worth Rs 700 million out of the allocated Rs 800.
However, social organisations had over subscribed NSC by Rs 250 million on a single day on Monday. The government had allocated NSCs worth Rs 800 million for individuals and Rs 200 million for the non-profit making social organisations.
Although subscription was opened for two days until Tuesday, the central bank
stopped taking in applications early morning on Tuesday after there were over subscription of Rs 450 million allocated to NSCs.
The government had issued NSCs on December 10, offering an interest rate of 8 percent. A senior NRB official said that individuals were disinterested to invest on the government’s debt instrument due to higher interest rates elsewhere, including at the financial institutions and cooperatives.
“The government also cannot offer more as long as there are options for getting loans at lower interest rate,” the official said.
The government had fixed a competitive interest rate of 3.25 percent when it issued development bond through competitive bidding in November.
The central bank official also believe the NRB’s decision not to allow insurance companies and pension funds such as Employees’ Provident Fund and Citizen Investment Trust this time around to subscribe to NSCs also resulted in under subscription of the debt instrument.
The undersubscribed portion of the NSCs is likely to be transferred to other type of debt instruments such as treasury bills and development bonds, the official said.
Source: The Kathmandu Post
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