Dhaka, Bangladesh (BBN) - The yields on treasury bills (T-bills) showed a mixed trend on Sunday as banks preferred to invest their excess liquidity in the risk-free securities.
The cut off yield, generally known as interest rate, on the 91-Day T-bills came down to 10.20 per cent on the day from 10.24 per cent of the previous level while the yield on 182-day T-bills fell to 10.39 per cent on the day from 10.50 per cent earlier
However, the yield on 364-Day T-bills rose to 10.50 per cent on the day from 10.39 per cent earlier, according to the auction results.
“Some banks are showing interest in investing their excess funds in the short-term securities, driven by a recent increase in liquidity inflows into the market,” a senior official of the Bangladesh Bank (BB) said while explaining the latest market situation.
Market interventions by the central bank, through purchasing US dollars from banks, have helped increase liquidity inflows into the market, according to the BB official.
The central bank purchased an additional US$83 million from 11 banks through an auction on Sunday, as part of its ongoing intervention in the foreign exchange market to maintain exchange rate stability.
The central banker also predicted that the existing trend of yields on the T-bills may continue in the coming weeks.
However, the government borrowed BDT 55 billion on the day through issuing three-type of T-bills to meet its budget deficit partly.
Currently, four T-bills are transacted through auctions to adjust government borrowings from the banking system. The T-bills 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 respectively, are traded in the market.
BBN/SSR/AD