Dhaka, Bangladesh (BBN) - The yields on Treasury Bills (T-bills) remained unchanged on Sunday as banks expressed unwillingness to invest their excess liquidity in short-term securities.
The cut off yield, generally known as interest rate, on the 91-Day T-bills remained unchanged at 11.48 per cent on the day from the previous level while the yield on 182-Day T-bills stayed 11.72 per cent from the earlier level.
However, the yield on 364-Day T-bills also remained unchanged at 11.89 per cent on the day from the previous level, according to the auction results.
“The pressure on money market has increased slightly as banks have to maintain 4.0 per cent cash reserve requirement (CRR) on Monday with the central bank,” a senior official of the Bangladesh Bank (BB) told the BBN while explaining the latest trend of yields on T-bills.
Under the existing rules, the banks are allowed to maintain the reserve at 3.50 per cent instead of the existing 4.0 per cent on a daily basis, but the bi-weekly average has to be 4.0 per cent in the end.
The central banker also said the existing trend of yields on the government securities may continue in the coming months.
The government borrowed nearly BDT 82.47 billion instead of the pre-auction targeted BDT 75 billion through issuing the treasury bonds on the day 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