Dhaka, Bangladesh (BBN)- Bangladesh government is set to borrow BDT 5.0 billion through issuing 91-Day Treasury Bills (T-bills) to finance budget deficit partly, officials said.
“The T-bills auction will be held in the Bangladesh Bank (BB) on Sunday after a month following a suspension imposed, by the government, for March to ensure proper cash management,” a senior treasury official of a leading private commercial bank told BBN in Dhaka.
The auction of Bangladesh Government Treasury Bonds (BGTBs), however, remained suspended, he added.
The government had suspended the auctions of both the T-bills and BGTBs for the month of March to use its excess liquidity with the central bank.
“The yield on the T-bills may be changed slightly today’s auction,” the treasury official hinted.
The last auction on 91-Day T-bills held on February 27, 2017. The cut off yield of the T-bills was 2.8900 per cent on the day, according to the BB statistics.
The government is set to borrow total Tk 20 billion through holding the auctions of 91-day T-bills in April.
On the other hand, the government is set to inject Tk 73 billion in the market for making payments against maturity of its T-bills and bonds in April from its excess liquidity, according to a BB official.
Net injection of funds will then stand at Tk 53 billion in April after deduction of gross borrowing worth Tk 20 billion, the central banker estimated.
The government’s latest move came against the backdrop of holding adequate amount of excess liquidity recently, according to the BB officials.
Currently, the government is holding around Tk 80 billion excess liquidity in its accounts.
Currently, four T-bills are being transacted through auctions to adjust the government’s borrowings from the banking system. The T-bills have 14-day, 91-day, 182-day and 364-day maturity periods.
The T-bills are short-term investment tools issued through auctions, 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 money market.