Govt borrows Tk 65b, yields on T-bills decrease

The yields on treasury bills (T-bills) decreased further on Sunday as banks opted to park their excess liquidity in the risk-free instruments.

The cut off yield, generally known as interest rate, on the 91-Day T-bills came down to 10.02 per cent on the day from 10.07 per cent of the previous level while the yield on 182-day T-bills fell to 10.02 per cent on the day from 10.13 per cent earlier

However, the yield on 364-Day T-bills came down to 10.01 per cent on the day from 10.14 per cent earlier, according to the auction results.

"Most banks are preferring to invest their excess funds in the government-approved securities, mainly because of subdued private sector credit demand ahead of the national election," a senior Bangladesh Bank (BB) official told The Financial Express (FE) while explaining the latest market situation.

The central banker also predicted that the existing trend of yields on the T-bills may continue in the coming weeks.

However, the government borrowed Tk 65 billion on the day through issuing three-type of T-bills to meet its budget deficit partly.

Currently, four T-bills are transacted through auctions to adjust government borrowings from the banking system. The T-bills have 14-day, 91-day, 182-day and 364-day maturity periods.

Furthermore, five government bonds, with tenures of two, five, 10, 15 and 20 years respectively, are traded in the market.

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