Dhaka, Bangladesh (BBN) - The yields on treasury bills (T-bills) are likely to rise slightly today as banks may express unwillingness to invest their excess liquidity in the securities.
The cut off yield, generally known as interest rate, on the 91-Day T-bills rose to 11.45 per cent in the immediate past auction from 11.24 per cent of the previous level while the yield on 182-Day T-bills rose to 11.75 per cent from 11.45 per cent.
However, the yield on 364-Day T-bills reached at 11.86 per cent on the day from 11.75 per cent earlier, according to the auction results.
"Most banks are still observing the impact of phasing out of the 28-Day repo facility on the market,” an expert said while explaining the latest market situation.
The Bangladesh Bank phased out its 28-Day repo facility from April 10 aiming to reduce banks' reliance on central bank liquidity support and encourage them to manage their own liquidity independently.
The government is set to borrow BDT 90 billion on Sunday through issuing three-type of T-bills to meet its budget deficit partly.
Currently, 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.
The bills are short-term investment tools issued through auction, conducted by the central bank on behalf of the government.
Furthermore, five government bonds, with tenures of two, five, 10, 15 and 20 years respectively, are traded on the market.
BBN/SSR/AD