Dhaka, Bangladesh (BBN)-The yield on two-year treasury bonds fell on Tuesday as Bangladesh Bank (BB) purchased an additional US$223.50 million from 14 banks to stabilise the US dollar against the local currency.
The cut-off yield on Bangladesh Government Treasury Bonds (BGTBs) dropped to 10.51 per cent from 10.72 per cent, according to auction results.
“Most banks are parking excess liquidity in risk-free securities as private sector credit demand remains weak ahead of the upcoming national polls,” a senior BB official said, citing political uncertainty and cautious lending sentiment. He added that higher remittance inflows, alongside the central bank’s dollar purchases, have eased yields on government securities.
On the day, the government raised BDT 35 billion through BGTBs and BDT 5.0 billion via Three-Year Floating Rate Treasury Bonds (FRTBs), whose cut-off yield fell to 10.67 per cent from 11.08 per cent.
FRTB coupons are linked to the benchmark 91-day Bangladesh Compounded Rate (BCR), which is based on Treasury Bill auction results.
Market operators said BB’s dollar purchases injected local currency into the system, easing short-term borrowing costs. The central bank has bought a total of $3.55 billion directly from banks since July under the free-floating exchange rate arrangement.
“Such interventions are gradually rebuilding the country’s foreign exchange reserves,” a central banker noted. Reflecting these efforts, gross forex reserves rose to $33.18 billion on January 1 from $32.80 billion on December 24, while BPM6 calculations showed reserves at $28.51 billion from $28.11 billion.
BBN/SSR/AD