January 10: After the situation of investable capital in banks and financial institutions has eased, the interest rate of the government's short-term treasury bills has come down to its lowest point in the current fiscal year.

On Monday, Nepal Rastra Bank (NRB) called for bids to renew treasury bills of Rs 16 billion including T-bills of Rs 2 billion for 28 days, Rs 8 billion for 91 days and Rs 6 billion for 364 days. During the auction, the central bank received applications more than the total worth of T-bills while the interest rate dropped to the lowest point.

For the 28-day treasury bills worth Rs 2 billion auctioned on Monday, the bid was Rs 10.59 billion more than the T-bills auctioned. The interest rate of the treasury bills remained at 7.93 percent. Last week, the interest on the 28-day treasury bills was maintained at 9.16 percent.

The central bank received bids for the 91-day treasury that exceeded the quotation of Rs 8 billion by Rs 5.52 billion. NRB said that the interest rate of the treasury bills also decreased by about 1 percentage point compared to the previous week and stood at 10.6 percent.

NRB had issued a repo for a period of 45 days on December 29. The average interest rate was maintained at 5.099 percent in the repo. As the liquidity in the market eased due to repo, the banks auctioned for more T-bills than the quotation of the central bank.

Likewise, the government has extended the period for commercial banks to calculate 80 percent of the local level's amount as deposits till mid-July. By Sunday, deposits in banks and financial institutions have reached Rs 5300 billion.

The disbursement of loans also increased by Rs 3 billion to Rs 4700 billion. Along with the increase in deposits, the CD ratio of banks also decreased from 86.44 to 86.40 percent. NRB informed that the inter-bank interest rate also decreased to 6.26 percent.