Dhaka, Bangladesh (BBN) – The banks’ investment increased by 8.35 per cent in the treasury bonds in 2015 mainly due to higher interest rates on the government approved long-term securities.
Aggregate investment in the treasury bonds –officially known as Bangladesh Government Treasury Bonds (BGTBs) – rose to BDT 1218.73 billion in the last calendar year from BDT 1124.81 billion a year before, according to the central bank latest statistics.
On the other hand, the banks’ investment in the T-bills dropped by 30.45 per cent to BDT 292.28 billion in 2015 from BDT 420.23 billion in the previous year.
Talking to BBN, a senior official of the Bangladesh Bank (BB) said it’s a portfolio transformation of the banks. “The banks may give emphasis on long-term deposits than short-term ones gradually to minimise their fund mismatch.”
However, higher interest rates on the BGTBs than that on T-bills encouraged the banks to invest more in treasury bonds than in the bills, according to the bankers.
“We’ve invested more in the BGTBs to minimise our cost of deposits,” a senior treasury official of a leading private commercial bank (PCB) told BBN in Dhaka.
The yield –generally known as interest rate – on the BGTBs came down to 5.50-8.70 per cent in December last from 8.48-11.98 per cent a year ago while the interest rates on T-bills dropped to 2.90-4.20 per cent from 7.50-8.40 per cent, according to the banker.
Currently, three T-bills are being transacted on auction to adjust government borrowings from the banking system. The T-bills have 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 on the money market.