Dhaka, Bangladesh (BBN) – The yield — rate of interest — on treasury bills (T-bills) has increased significantly in the last week amid the expectation of the commercial banks about higher yield on the government securities in the backdrop of the hike earlier this month in policy rates by the central bank.
The yield on 91-day T-bills reached the range of 8.04-8.05 percent on Sunday last from 7.39-7.40 percent of the previous auction, held on August 21 last while the yield on 364-day T-bills reached, 8.64-8.65 percent from 7.89-7.90 percent, according to the auction results.
The yield on T-bills rose following the increase of the central bank’s policy interest rates by fifty basis points recently to curb inflationary pressures.
The interest rate on repurchase agreement (repo) was re-fixed at 7.25 percent on September 4 last from 6.75 percent while the reverse repo rate was increased to 5.25 percent from 4.75 percent.
Thirteen bids, amounting to a total of BDT 4.14 billion for 91-day T-bills and 14 bids, to a total of BDT 2.45 billion for 364-day T-bills, were offered.
Of those, 13 bids, amounting to a total of BDT 4.0 billion for 91-day T-bills and 14 bids, amounting to a total of BDT 2.45 billion for 364-day T-bills, were accepted, the central bank said in its auction result.
Besides, BDT 50 million were devolved on primary dealers (PDs) for 364-day T-bills, it added.
The central bank earlier selected 15 PDs – 12 commercial banks and three non-banking financial institutions (NBFIs) – to deal with government securities in the secondary market.
Auction of 15-Year Bangladesh Government Treasury bond was held on September 20, 2011 of which 14 bids amounting total of BDT 1.47 billion were offered against pre-targeted amount of BDT 1.50 billion.
Fourteen bids amounting total of BDT 1.47 billion were accepted and BDT 30 million was devolved on PDs. The coupon rate of the accepted bids was 10.30 percent.
BBN/SSR/AD-24Sept11-2:51 pm (BST)