Dhaka, Bangladesh (BBN)– Auction of treasury bills (T-bills) remains suspended in September this year as surplus balance in government account exceeded Tk 17 billion, officials said on Monday.

“We’ve taken the latest move as per Cash and Debt Management Technical Committee’s (CDMTC) decision,” a senior official of the Bangladesh Bank (BB) said, adding that all banks and financial institutions have already been informed about the CDMTC’s decision.

The auction of T-bills was not held last month while the auction of government bonds continued, the BB officials added.

“The government does not need to borrow through issuing the short-term securities in the current month as its fund position is satisfactory,” a CDMTC member said.

The surplus balance in government account stood at BDT 17.15 billion as of August 3 last, according to the central bank statistics.
The central bank earlier introduced monthly auction calendar of T-bills for the first time aiming to manage the government bank borrowing effectively.

Currently, three T-bills are being transacted through auctions to adjust the government borrowing from the banking system.

The T-bills have 91-day, 182-day and 364-day maturity periods.

On the other hand, four government bonds of 5-year, 10-year, 15-year and 20-year terms are being traded in the markets.

The central bank official said the government has continued changing its debt management strategy, focusing more on long-term borrowing to facilitate development activities.

Under the strategy, the government will increase borrowing for longer tenure by issuing different bonds instead of short-term borrowing through T-bills.

During FY11, the government will borrow a total of BDT 156.80 billion from the commercial banks and financial institutions through issuing T-bills and bonds.

As part of the strategy, the government has decided to borrow BDT 125.70 billion from the banking system by issuing bonds, while BDT 31.10 billion will be borrowed through auction of three categories of T-bills.

BBN/SI/AD-21Sept10-12:38 am (BST)