Dhaka, Bangladesh (BBN) - The yield on 10-Year BGTBs fell slightly today as the banks expressed their willingness to invest excess funds in the long-term securities.
The cut off yield, generally known as interest rate, on the BGTBs came down to 12.50 per cent on Tuesday from 12.55 per cent earlier, according to auction results.
The government borrowed nearly BDT 44.93 billion instead of the pre-auction targeted BDT 20 billion through issuing the treasury bonds on the day to meet its budget deficit partly.
“Most of the banks prefer to invest their excess liquidity in the government securities following lower credit demand from private sector,” a senior official of the Bangladesh Bank (BB) told the BBN while explaining higher borrowing at the auction.
He also said the yields on T-bills may fall in the next auction on the same ground.
Currently, five government treasury bonds, with tenures of two, five, 10, 15 and 20 years respectively, are traded on the market.
Besides, four treasury bills (T-bills) are transacted through auction to adjust government borrowings from the banking system. The T-bills have 14-day, 91-day, 182-day and 364-day maturity periods.
BBN/SSR/AD