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The yield on two-year Bangladesh Government Treasury Bonds (BGTBs) increased significantly on Tuesday as banks expressed unwillingness to invest their excess liquidity in the securities ahead of Eid-ul-Azha.
The cut off yield, generally known as interest rate, on the BGTBs rose to 12.29 per cent on the day from 11.97 per cent earlier, according to auction results.
The government borrowed Tk 35 billion through issuing the BGTBs on the day to meet its budget deficit partly.
"Most banks have been reluctant to invest their excess funds in the risk-free securities ahead of the Eid," a senior official of Bangladesh Bank (BB) told The Financial Express (FE). He also predicted that yields on BGTBs may ease slightly after the Eid.
Besides, the government borrowed Tk 5.0 billion on the day through issuing Three-Year Floating Rate Treasury Bonds (FRTBs). The cut off yield on the FRTB reached at 13.19 per cent on the day from 12.94 per cent earlier.
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