According to the latest treasury position of the government prepared by the central bank, the government spent over Rs 4.5 billion between April 17 and April 24 pushing the total investment to Rs 107.4 billion.
As a result of such an injection of capital into the slightly dry money market, the 91-day Treasury Bills attracted bids worth over three times the offered amount. Nepal Rastra Bank last week called bids for Rs 500 million, but received bids amounting Rs 1.80 billion from 10 commercial banks, said an official of the bank.
As an indication of shortage of liquidity -- the standby resources held by the banks for investments last week -- only 72 percent of the offered amount was bidden a week earlier, the lowest in recent months.
The central bank has offered Rs 500 million worth of 91-day treasury bills in its weekly action. However, only six banks tabled 21 applications worth 360 million in the bidding process.
However, despite the flow of huge amount of fresh capital into the market, the rate of 90-day treasury bills increased marginally to 6.81 percent from last week´s 6.76 percent. “Ongoing fluctuations seen in the forex market might have fuelled the discount rate of the treasury bills to go up,” said the official.
Latest figures released by the central bank says that the government increased expenditure worth Rs 2.75 billion under the heading of recurrent expenditure last week.
Similar is the case for capital expenditure, which also saw an increase of Rs 1.24 billion over the week. As a result of heavy government expenditure last week, the central treasury position of the government also declined marginally to Rs 24.78 billion whereas it was Rs 27.76 billion, the highest in recent years.
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