Dhaka, Bangladesh (BBN)– Auction of treasury bills (T-bills) resumed in October that may continue in the rest of months of the current fiscal year after suspension of two months, officials said.
“We’ve resumed the auction of T-bills this month in line with the Cash and Debt Management Technical Committee’s (CDMTC) decision,” a senior official of the Bangladesh Bank (BB) said, adding that the central bank has already issued a circular in this connection and asked all banks and non-banking financial institutions (NBFIs) for participation in the auctions.
The government is set to borrow BDT 21.50 billion in this month through issuing T-bills, according to the auction calendar.
“The auction of T-bills may continue in the coming months of this fiscal considering cash balance of the government accounts,” another BB official said without elaborating.
The auction of T-bills was not held in August while the auctions of government bonds were conducted, the central bank officials added.
They also said the government did not need to borrow through issuing the short-term securities in September as its fund position was at satisfactory level.
The surplus balance in government account stood at BDT 17.15 billion as of August 3 this year, the BB officials said.
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.
The central bank of Bangladesh earlier issued a circular asking all commercial banks and NBFIs to follow the new calendar of T-bills auctions for July 2010 and bonds auctions for the first six months of fiscal 2010-2011 (FY11).
Four government bonds of 5-year, 10-year, 15-year and 20-year are now being traded in the markets.
The central bank officials 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/SSR/SI-11Oct10-8:15 pm (BST)
