Market participants said the cautious lending environment has prompted banks to prefer risk-free instruments, while ongoing geopolitical uncertainties have dampened business confidence and borrowing appetite.

According to the latest auction results, the cut-off yield—generally known as the interest rate—on the 91-day T-bills remained unchanged at 9.89 per cent from the previous level.

However, the yield on 82-day T-bills edged up slightly to 10.00 per cent from 9.99 per cent, while the yield on 364-day T-bills remained stable at 10.00 per cent.

On the day, the government raised BDT 82.50 billion through the issuance of three tenors of T-bills to partially finance its budget deficit.

“Most banks preferred to invest their excess liquidity in risk-free government securities due to lower private sector credit demand amid ongoing geopolitical tensions,” a senior official of the Bangladesh Bank (BB) said while explaining the latest market situation.

Recent data from the central bank show that private sector credit growth slowed to 6.03 per cent year-on-year in January 2026, down from 6.10 per cent in December last, indicating weak investment appetite in the real economy.

Analysts said the combination of soft credit demand and comfortable liquidity in the banking system has continued to support banks’ appetite for government securities, keeping yields relatively stable in recent auctions.

The BB official also indicated that the current trend in government security yields may persist in the coming weeks if liquidity conditions remain comfortable and credit demand fails to pick up significantly.

Currently, four types of Treasury bills—14-day, 91-day, 182-day and 364-day —are auctioned regularly to help adjust government borrowings from the banking system.

In addition, five government bonds with maturities of two, five, 10, 15 and 20 years are traded in the domestic debt market, providing longer-term investment instruments for banks and other institutional investors.

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The cut-off yield—commonly known as the interest rate—on the 91-day T-bills edged down to 9.89 per cent from 9.90 per cent at the previous auction.

In contrast, the yield on the 182-day T-bills rose slightly to 9.99 per cent from 9.98 per cent. The yield on the 364-day T-bills also increased, reaching 10.00 per cent compared with 9.94 per cent earlier, according to the auction results.

The government raised BDT 82.50 billion on the day through the issuance of the three types of T-bills to partially finance its budget deficit.

Market participants said banks were increasingly cautious in managing their investment portfolios amid ongoing geopolitical tensions and uncertainty in global financial markets.

“Most banks preferred investing their excess liquidity in shorter-tenure instruments rather than longer-term ones, reflecting cautious portfolio management amid the ongoing geopolitical tension,” a senior executive at a leading private commercial bank said while explaining the latest market situation.

The banker also predicted that the current trend in government security yields may persist in the coming weeks, depending on liquidity conditions in the banking system and broader economic developments.

Currently, four types of T-bills—14-day, 91-day, 182-day and 364-day—are transacted through auctions to facilitate the government’s short-term borrowing from the banking system.

In addition to T-bills, five Bangladesh Government Treasury Bonds (BGTBs) with tenures of two, five, 10, 15 and 20 years are traded in the market to meet the government’s medium- and long-term financing needs.

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Surplus funds, coupled with strong remittance inflows ahead of Eid-ul-Fitr, have prompted lenders to park excess money in risk-free government securities, driving yields lower, according to bankers.

The cut-off yield, commonly known as the interest rate, on 91-day treasury bills declined to 9.90 per cent from 10.02 per cent previously.

The yield on 182-day bills dropped to 9.98 per cent from 10.11 per cent, while the 364-day T-bill yield fell to 9.94 per cent from 10.07 per cent, according to auction results.

The policy rate—also known as the repo rate—set by the Bangladesh Bank (BB), the country’s central bank, currently stands at 10 per cent.

On the day, the government raised BDT 82.50 billion through the issuance of three types of T-bills to partly finance its budget deficit.

The last time T-bill yields slipped below the policy rate was on September 28 last year, under similar liquidity conditions.

“Most banks are now preferring to invest their excess funds in risk-free government securities due to subdued private sector credit demand amid lingering uncertainty following the just-concluded national election,” a senior central banker said, explaining the current market dynamics.

Private sector credit growth slowed to 6.10 per cent year-on-year in December 2025, down from 6.58 per cent a month earlier, according to the central bank’s latest data.

Officials also noted that higher inward remittance inflows have boosted market liquidity, exerting downward pressure on T-bill yields.

The central bank has continued purchasing US dollars directly from banks to offset strong remittance inflows ahead of the Eid-ul-Fitr, they added.

As part of its ongoing open market operations, the central bank of Bangladesh has bought $5.47 billion from banks since July 13 last year under the prevailing free-floating exchange rate regime.

Currently, four treasury bills—maturing in 14, 91, 182 and 364 days—are auctioned to manage government borrowing from the banking system.

Besides, five government bonds with tenures of two, five, 10, 15 and 20 years are traded in the market.

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The cut-off yield—generally regarded as the interest rate—on the 91-day T-bills increased to 10.40 per cent from 10.05 per cent, while the yield on the 182-day T-bills rose to 10.34 per cent from 10.23 per cent previously.

The yield on the 364-day T-bills also edged up to 10.49 per cent from 10.34 per cent earlier, according to the auction results.

On the day, the government raised BDT 75 billion by issuing three types of T-bills to partially finance its budget deficit.

“Under the new PD guidelines, only PD banks are allowed to participate in auctions by submitting bids, which has helped push up T-bill yields,” a senior Bangladesh Bank (BB) official said while explaining the latest market developments.

Earlier, the central bank selected 24 primary dealers to facilitate trading of government-approved securities in the secondary market.

Currently, four types of T-bills are issued through auctions to manage government borrowing from the banking system. These instruments have maturities of 14 days, 91 days, 182 days and 364 days.

In addition, five government bonds, with tenures of two, five, 10, 15 and 20 years, are actively traded in the market.

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The cut-off yield on the 91-day T-bills fell to 10.14 per cent from 10.42 per cent previously, while the yield on the 182-day bills eased to 10.25 per cent from 10.55 per cent.

The yield on the 364-day T-bills also dropped to 10.34 per cent from 10.66 per cent earlier, according to auction results.

The government raised BDT 80 billion on the day by issuing the three categories of T-bills to partially finance its budget deficit.

Yields on T-bills had also declined on similar grounds on January 4.

“Most banks are keen to invest their excess liquidity in government securities as private sector credit demand remains subdued ahead of the upcoming national election,” a senior Bangladesh Bank (BB) official said while explaining the latest market situation.

Private sector credit growth stood at 6.58 per cent year-on-year in November 2025, up slightly from 6.23 per cent in the previous month, according to the central bank’s latest data.

Higher inflows of remittances, coupled with the central bank’s purchases of US dollars, have further strengthened market liquidity, putting downward pressure on yields on government securities, the central banker noted.

Bangladesh Bank has so far purchased $3.75 billion from banks since July 13 under the prevailing free-floating exchange rate regime, BB data showed.

The central banker also said the current declining trend in government securities yields may continue in the coming weeks.

At present, four T-bills—14-day, 91-day, 182-day and 364-day—are auctioned to manage government borrowing from the banking system.

In addition, five government bonds with maturities of two, five, 10, 15 and 20 years are traded in the market.

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The cut-off yield on the 182-day T-bills rose to 10.65 per cent from 10.57 per cent, while the 364-day T-bill yield increased marginally to 10.72 per cent from 10.70 per cent.

In contrast, the yield on 91-day T-bills eased to 10.53 per cent from 10.55 per cent, reflecting banks’ preference for shorter tenors.

The government raised BDT 70 billion through the issuance of three types of T-bills to partially finance its budget deficit.

Market participants said banks are avoiding longer maturities to preserve balance-sheet flexibility ahead of the December 31 year-end and the national election scheduled for February 12, 2026.

A senior Bangladesh Bank official predicted the existing trend of yields on the government securities may continue in the coming weeks.

Currently, four T-bills—14-day, 91-day, 182-day and 364-day—are auctioned to manage government borrowing from the banking system, alongside five treasury bonds with tenures ranging from two to 20 years.

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The cut-off yield, generally regarded as the interest rate, on 91-day T-bills rose to 10.14 per cent from 10.07 per cent, while the 182-day T-bill yield edged slightly down to 10.14 per cent from 10.15 per cent.

Meanwhile, the 364-day T-bill yield increased to 10.24 per cent from 10.10 per cent, according to auction results.

Despite the mixed yield trends, the government raised BDT 75 billion by issuing the three types of T-bills to finance its budget deficit.

“Most banks are reluctant to park their excess funds in T-bills ahead of the year-end closing on December 31,” a senior central banker said while explaining the latest market situation.

The official also predicted that the current trend in government securities yields may continue in the coming weeks.

Currently, four types of T-bills are transacted through auctions to manage government borrowing from the banking system, with maturities of 14 days, 91 days, 182 days, and 364 days.

In addition, five government bonds with tenures of 2, 5, 10, 15, and 20 years are also traded in the market.

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The cut-off yield—generally regarded as the interest rate—on the 91-day T-bills eased to 10.07 per cent from 10.09 per cent, while the yield on the 182-day T-bills slipped to 10.15 per cent from 10.30 per cent.

On the other hand, the yield on the 364-day T-bills edged up to 10.10 per cent from 10.04 per cent, according to auction results.

 “Most banks are not interested in parking their excess funds in long-term T-bills as they are trying to manage liquidity more efficiently ahead of the upcoming national election,” a senior Bangladesh Bank (BB) official said while explaining the latest market dynamics.

However, the government borrowed BDT 87.89 billion, exceeding the pre-auction target of BDT 75 billion, through the issuance of all three types of T-bills to help finance its budget deficit.

Higher government funding requirements ahead of the national polls may push up yields on such securities in the near future, according to a senior treasury official at a leading private commercial bank.

“Most banks still prefer to invest excess funds in short-term T-bills to avoid potential interest rate volatility during the election period,” the treasury official explained.

The private banker also predicted the current trend in yields on government securities is likely to continue in the coming weeks.

Currently, four types of T-bills—14-day, 91-day, 182-day and 364-day—are auctioned to manage the government’s borrowing needs.

Additionally, five government bonds with tenures of two, five, 10, 15 and 20 years are actively traded in the market.

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According to auction results, the cut-off yield—generally considered the interest rate—on Bangladesh Government Treasury Bonds (BGTBs) increased to 10.15 per cent from 9.34 per cent earlier.

Despite the rise, the government borrowed BDT 30 billion through the BGTBs to partially meet its budget deficit.

“Most banks are managing their funds cautiously to avoid any unexpected situation surrounding the upcoming national election,” a senior treasury official at a leading private commercial bank (PCB) said while explaining the latest market trend.

The official added that the banks are also reluctant to park excess funds in government securities ahead of the year-end closing on December 31.

The private banker also predicted that the current trend of higher yields on government securities may continue in the coming weeks.

Currently, five government bonds with tenures of two, five, 10, 15, and 20 years are actively traded in the market.

In addition, four treasury bills (T-bills) with 14-day, 91-day, 182-day, and 364-day maturities are auctioned to adjust government borrowing from the banking system.

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The cut off yield, generally known as interest rate, on the 91-Day T-bills rose to 10.24 per cent in the immediate past auction from 9.53 per cent of the previous level while the yield on 182-Day T-bills inched up to 9.99 per cent from 9.98 per cent.

But the yield on the 364-day T-bills remained unchanged at 9.99 per cent, according to the auction results.

Most banks are likely to show reluctance in investing their excess funds in government-approved securities ahead of the year-end closing, market insiders hinted.

The government is set to borrow BDT 75 billion on Sunday through issuing three-type of T-bills to meet its budget deficit partly.

Currently, four T-bills are transacted through auction to adjust government borrowings from the banking system. The T-bills have 14-day, 91-day, 182-day and 364-day maturity periods.

The bills are short-term investment tools issued through auction, 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 market.

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