Dhaka, Bangladesh (BBN) - Yields on treasury bills (T-bills) decreased on Sunday, as banks chose to invest their excess liquidity in government securities amid subdued private credit demand ahead of the national election.
The cut off yield, generally known as interest rate, on the 91-Day T-bills came down to 9.51 per cent on the day from 9.69 per cent of the previous level while the yield on 182-day T-bills fell to 9.71 per cent on the day from 9.89 per cent earlier
In addition, the yield on 364-Day T-bills came down to 9.60 per cent on the day from 9.70 per cent earlier, according to the auction results.
However, the government borrowed BDT 75 billion on the day through issuing three-type of T-bills to meet its budget deficit partly.
“Most banks are preferring to invest their excess funds in the risk-free government securities, following lower private sector credit demand ahead of the general election,” a senior Bangladesh Bank (BB) official told The Financial Express (FE) while explaining the current market situation.
Meanwhile, the growth in private sector credit fell to 6.35 per cent in August 2025 on a year-on-year basis, from 6.52 per cent a month ago, indicating weakening business confidence and tighter lending conditions.
He also said the rising liquidity inflow into the market has contributed to the decline in yields on the government securities (G-Secs).
Ongoing market interventions by the central bank of Bangladesh, through purchasing the US dollars through auctions from banks, have helped increase liquidity inflows into the market recently, according to the central banker.
The central bank has so far bought US$2.09 billion from banks directly since July 13 last under the prevailing free-floating exchange rate arrangement, according to official latest data.
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