Government to Raise Nearly Rs 20 Billion Through Treasury Bills

The Government of Nepal is set to raise nearly Rs 19.85 billion in internal loans through the auction of Treasury Bills, according to the Public Debt Management Office.

Out of the total amount, Rs 5 billion worth of new Treasury Bills will be issued, while Rs 14.85 billion worth of existing bills will be renewed. The instruments will have maturities of 182 days and 364 days. The auction will remain open until 2 PM on Monday, and the bills will be issued on Tuesday.

Due to the abundance of liquidity in the banking system, demand for Treasury Bills has been very high, resulting in a decline in discount rates below 2.75 percent. In the previous auction, the weighted average interest rate for 91-day bills was 2.36 percent, while for 182-day bills it was 1.61 percent.

High competition among banks has continued to push discount rates downward. The latest Treasury Bill auctions saw demand nearly seven times higher than the available supply, according to the Public Debt Management Office.

Experts note that, since credit expansion in other sectors remains limited, banks are investing in government securities to earn short-term returns. This has also contributed to a decline in short-term interest rates in the market.

Treasury Bills are short-term government securities issued to raise internal loans with a maturity period of one year or less, typically available in 28-day, 91-day, 182-day, and 364-day tenures.