Dhaka, Bangladesh (BBN)- The interest rate on 30-Day Bangladesh Bank Bills increased slightly Monday as commercial banks are not interested to buy the monetary instrument with lower interest rate, treasury officials said.

The rate of weighted yield, generally known as interest rate, of the bills rose to 1.07 per cent on the day from 1.00 per cent of the previous auction, held on October 5 last, according to auction results.

“We’ve accepted bids, which were offered higher interest, aiming to ease the pressure of excess liquidity in the money market,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka.

He also said it is a temporary measure totally. “When the market will turn around then the measure may be suspended,” he added.

On August 10 last, the central bank reintroduced the auction of 30-day Bangladesh Bank Bills aiming to mop up the excess liquidity from the market. The BB accepted eight bids worth BDT 4.50 billion at the auction on the day for the bills, resulting in withdrawal of the money from the market on the same day, the treasury officials added.

A total of 10 bidders offered bids worth BDT 5.10 billion for the short-term security, according to the BB’s auction result.

The central bank has taken the move against the backdrop of pilling up of excess liquidity in the banking sector to all-time high at BDT 347 billion in June 2009.

BBN/SS/SI/AD-13October09-12:19 am (BST)