Dhaka, Bangladesh (BBN) – The Bangladesh government has resumed the auctions of treasury bills (T-bills) for the month of April while the auction of bonds remains suspended.
The auctions of both T-bills and bonds were suspended for the month of March to ensure the government’s proper cash management, officials said.
Bangladesh Bank (BB) communicated the government’s latest decision on resumption of auctions of T-bills to the commercial banks on Thursday.
The government, however, is set to borrow BDT 20 billion through holding the auctions of 91-day T-bills in April. The first auction will be held in the BB on Sunday.
Talking to the BBN, a Bangladesh Bank senior official said the central bank has already conveyed the government’s decision to the banks in line with the Ministry of Finance’s advice.
The government’s latest move came against the backdrop of holding adequate amount of liquidity recently, the central banker explained.
Currently, the government is holding around BDT 77 billion excess liquidity in its accounts.
On the other hand, the government is set to inject BDT 73 billion in the market for making payments against maturity of its T-bills and bonds in April from its excess liquidity, according to another BB official.
Net injection of funds will then stand at BDT 53 billion in April after deduction of gross borrowing worth BDT 20 billion, the central banker estimated.
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.