Interest rate on ten-year bills to rise three percentage points
The Central Bank (BDL) and the Ministry of Finance (MoF) have agreed to finance the State in 2019 through the banking sector at interest rates currently prevalent on the market, said Riad Salameh, Governor of BDL.
Interest rate on ten-year treasury bills will be raised to 10.5 percent. The yield on such bills was 7.46 percent at the end of September.
The Central Bank used to channel low-cost lending from banks to the State through swap operations. BDL was allowing banks to earn generous interest rates in order to encourage them to participate in funding the State while the Central Bank itself was subscribing to public debt instruments at low interest rates. BDL was thus shouldering the cost resulting from the difference in interest rates.