Dhaka, Bangladesh (BBN) - The yields on two types of long-term Bangladesh Government Treasury Bonds (BGTBs) fell on Tuesday, as a section of banks expressed willingness to invest their excess liquidity in the securities.
The cut-off yield, generally known as interest rate, on the 15-year BGTBs came down to 12.20 per cent from 12.40 per cent earlier and the yield on the 20-year BGTBs fell to 12.24 per cent from 12.46 per cent, according to the auctions.
The banks have expressed their willingness to invest funds in the long-term BGTBs, anticipating a potential decline in interest rates in the near future, according to market insiders.
The declining trend in inflation, coupled with a higher inflow of funds from overseas sources, may help bring down the interest rates in the near future, they explained.
However, the government borrowed BDT 30 billion through issuing the long-term BGTBs on the day to partially meet its budget deficit.
Currently, five government bonds, with tenures of two, five, 10, 15 and 20 years respectively, are traded on the market.
On the other hand, four T-bills are transacted through auction to adjust government borrowings from the banking system. The T-bills have 14-day, 91-day, 182-day and 364-day maturity periods.
BBN/SSR/AD