Dhaka, Bangladesh (BBN) - The upward trend of yields on treasury bills (T-bills) continued on Sunday as banks remained reluctant to invest their excess liquidity in the securities.
The cut-off yield, generally known as interest rate, on the 91-day T-bills rose to 11.59 per cent on the day from the previous level of 11.45 per cent, while the yield on the 182-day T-bills reached 11.84 per cent from 11.75 per cent from the earlier level.
However, the yield on the 364-day T-bills rose to 11.92 per cent on the day from 11.86 per cent earlier, according to the auction results.
Market insiders said most banks are not interested in investing their funds in the risk-free securities due to the ongoing liquidity pressure on the market.
Banks are still observing the possible impact of the phasing out of the 28-day repo facility on the market, they added.
Meanwhile, the Bangladesh Bank (BB), the country’s central bank, phased out its 28-day repo facility on April 10 to reduce banks' reliance on central bank liquidity support and encourage them to manage their own liquidity independently.
The central bank officials, however, said upward trend of the government’s bank borrowing has pushed up the yields on the T-bills.
Bangladesh government is borrowing BDT 90 billion through the issuance of three types of T-bills in each weekly auction of April 2025, up from BDT 75 billion previously, according to the central banker.
As part of the strategy, the government borrowed BDT 90 billion on Sunday through issuing the T-bills to meet its budget deficit partly.
Currently, four T-bills are transacted through auction to adjust government borrowings from the banking system. They have 14-day, 91-day, 182-day, and 364-day maturity periods.
Furthermore, five government bonds, with tenures of two, five, 10, 15, and 20 years, are traded on the market.
BBN/SSR/AD