Dhaka, Bangladesh (BBN)– The interest rates on two treasury bills (T-bills) increased slightly on Sunday after nearly six months ahead of the Eid-ul-Fitr festival, treasury officials said.

The yield, generally known as interest rate, on 91-day T-bill rose to the range of 1.15-2.00 percent on the day from 1.00-1.28 percent of the previous auction, held on July 26, 2009.

Besides, the yield on 364-day T-bill rose to 3.98-4.49 per cent on the day from 4.01-4.29 per cent of the previous auction, held on July 26, according to the auction results.

“The yield of the T-bills has been fixed in line with the market demand,” a senior official of the Bangladesh Bank (BB), the country’s central bank, said, adding that it’s a seasonal impact ahead of the Eid festival.

“It’s an upward movement of the interest rates on T-bills after nearly six months,” a senior treasury official of a commercial bank said, adding that the actual trend of interest rates on the T-bills will be cleared after holding one or two auction bids.

The interest rates on T-bills has been started falling since April 5 this year after slashing interest rates on repurchase agreement (repo) and reverse repo by the central bank aiming to mitigate the impact of ongoing global financial recession through boosting fresh investment.

The yield on 91-day T-bill decreased to 7.70-7.80 per cent on April 5 this year from 7.92 percent of the previous auction, held on January 25.

Besides, the yield on 364-day T-bill came down to 8.57 percent on the day from 8.60 percent of the previous auction, held on March 22, 2009.

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

BBN/SS/SI/AD-07September09-2:02 am (BST)