Dhaka, Bangladesh (BBN) - The yields on two-type of long-term treasury bonds jumped on Tuesday ahead of the upcoming Eid-ul-Fitr festival, officials said.
“Demand for the treasury bonds dropped significantly as banks showed reluctance to invest their excess liquidity in the long-term securities ahead of the Eid festival,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka.
The cut off yield, generally known as interest rate, on the 15-Year Bangladesh Government Treasury Bonds (BGTBs) rose to 12.28 per cent on the day from 11.36 per cent earlier while the yield on the 20-Year BGTBs stood at 12.54 per cent from 12.05 per cent, according to the auction results.
The central banker also predicted that the yields on the long-term securities may fall slightly after the Eid festival.
The government borrowed BDT 30 billion through issuing the 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 treasury bills (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/SI