Govt raises Tk 50b in spl T-bill auction

The government raised Tk 50 billion in a single day through a special auction of short-term treasury bills on Wednesday, signalling growing reliance on bank borrowing to finance its budget deficit.

The move comes amid rising fiscal pressures linked to global uncertainties, with officials pointing to geopolitical tensions as a key factor shaping borrowing trends.

The yield on the T-bills rose to 9.88 per cent on the day, up from 9.78 per cent earlier, according to the auction results.

"The yield on the T-bills increased due to the special auction," a senior treasury official at a leading private commercial bank told The Financial Express (FE) in response to a query.

He also said government borrowing from the banking system is likely to increase gradually during the final quarter of the current fiscal year (FY) 2025-26 amid geopolitical tensions.

"The ongoing Middle East conflict has created additional pressure on the government's budgetary expenditures," the treasury official explained.

On the other hand, a senior official familiar with government debt management said the additional borrowing was aimed at meeting budgetary expenses at a relatively lower yield.

He also noted that the yield on the T-bills remained below the policy rate.

Currently, the Bangladesh Bank's (BB) policy rate, also known as the repo rate, stands at 10 per cent.

At present, four types of T-bills are traded through auctions to manage government borrowings from the banking system, with maturities of 14 days, 91 days, 182 days and 364 days.

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

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