Five-Year Guaranteed Interest Rate: Treasury's New Move

The Treasury is borrowing for five years with an interest rate of around 38%. Moreover, this interest rate will not change over time, guaranteed until the end of the term. Would you accept a 38% guaranteed interest rate for five years if it were offered to you now? The banks are as solid as the state, but what if the state itself offered this interest rate, 38%? It already is… The Treasury's last two borrowings on June 17 and July 8 had a compound annual interest rate of 37.94% and 37.97% for approximately five years.

Interest Rates

■Up to one month 46.63%,

■Up to three months 49.20%,

■Up to six months 48.60%,

■Up to one year 45.90%,

■More than one year 42.06%.

Treasury Borrowings

The Treasury is also engaging in non-fixed rate borrowings. Inflation-indexed, foreign currency, and gold-indexed borrowings are being carried out. The interest rates on these borrowings may be higher than initially anticipated over time or could be significantly lower if developments turn positive.

How will the markets react to this and how will the Treasury's move affect the economy, only time will tell.