Yield curve swings up?
Rejaul Karim Byron's fairly informative story on recent interest rate hikes ("Interest yield curve swings up", DS July 10) is marred by its title. The story has nothing to do with the yield curve. As any student of finance should know, the yield curve depicts the relationship at a given point of time between interest rates and maturities of debt instruments. Normally, the curve rises gently with the length of maturities, debts with longer maturities yielding higher return (earning higher interest) than shorter debts. A rising curve "normally" suggests investor optimism about the future of the economy, a flat curve suggesting the opposite. Mr. Karim's story focuses only on interest rates being raised by banks in Bangladesh in recent months and has no bearing on the shape or movement of the yield curve in the country. His choice of the title is thus misleading. While perhaps in some future article he will enlighten us with his analysis of the actual yield curve in the country, in the present story he does nothing of the sort.
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