Dhaka, Bangladesh (BBN)- The government borrowed BDT 113.45 billion instead of the pre-auction target BDT 85 billion on Sunday through issuing three-type of treasury bills (T-bills) to meet its budget deficit partly, officials said.
“The government is interested to borrow more through issuing short-term T-bills than that of treasury bonds,” a senior official familiar with the government debt-management activities told the BBN while explaining the higher borrowing than pre-auction target.
He also said lower loan requirements of the government is pushing down the yields on the securities including T-bills.
Meanwhile, the yields on two-type T-bills fell slightly on the day as banks expressed willingness to invest their excess liquidity in short-term securities.
The cut off yield, generally known as interest rate, on the 91-Day T-bills came down to 11.45 per cent on the day from 11.48 per cent while the yield on 364-Day T-bills fell to 11.88 per cent from 11.89 per cent.
However, the yield on 182-Day T-bills remained unchanged at 11.72 per cent on the day from the previous level, according to the auction results.
Currently, four 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.
The bills are short-term investment tools issued through auction, conducted by the central bank on behalf of the government.
Furthermore, five government bonds, with tenures of two, five, 10, 15 and 20 years respectively, are traded on the market.
BBN/SSR/AD