The government has introduced two treasury bonds to woo general investors in the bond market.

The central bank will hold the auction of the bonds with five-year and ten-year tenors on December 28, according to a central bank circular released yesterday.

Investors, who will be able to participate in the auction through primary dealers, will receive profits in every six-month interval.

At the initial stage, the bonds worth Tk 100 crore will be released in the market. The lowest price of the bond will be Tk one lakh.

7.5 per cent interest will be

given for five-year bond and 8.5 per cent interest for ten-year bond.

Different life insurance institutions, banks, financial institutions and institutional and individual investors will be able to purchase the bonds, titled Bangladesh Government Treasury Bond. Provident fund can also be used for investing in the bonds.

Bangladeshi expatriates will also be able to buy the bonds and receive the profit in foreign currency. But they will not be allowed to sell the bonds to any people living in Bangladesh within one year of purchase.

The central bank also yesterday appointed eight banks and a finan-

cial institution as primary dealer (PD) for transacting government bonds and securities in the secondary market.

The appointed PDs include Sonali Bank, Agrani Bank, Janata Bank, Prime Bank, Uttara Bank, Jamuna Bank, Southeast Bank, National Credit and Commerce Bank and International Leasing and Financial Services Ltd.

Individual investors will be able to purchase the bonds from banks and financial institutions along with PDs.

But, Bangladesh Bank sources said later only PDs will be allowed to purchase these bonds and securities after full-swing operation of

the secondary market.

The government will also launch a bond worth Tk 174 crore to raise fund for gas well development. Finance ministry has approved the proposal and sent it to the central bank.

The sources also said a process is under consideration to launch more bonds worth about Tk 700 crore to raise funds for power and telephone sectors.

The government has resorted to bond market as it has reduced borrowing from the banking system and cut interest rates on savings instruments, sources said.