T-bill yields fall further

The yields on treasury bills (T-bills) dropped further on Sunday while some banks preferred to invest their excess funds in the risk-free short-term securities amid a recent increase in the banks' liquidity inflows.

The cut-off yield -- commonly referred to as the interest rate -- on the 91-day T-bills came down to 10.24 per cent on the day from the previous level of 10.33 per cent.

However, the yield on 182-day T-bills fell to 10.50 per cent on the day from 10.61 per cent earlier, while the yield on 364-day T-bills came down to 10.39 per cent from 10.62 per cent, according to the auction results.

"A number of banks have shown interest in investing their excess funds in short-term securities amid a recent increase in liquidity inflows," a senior official of the Bangladesh Bank (BB) told The Financial Express (FE) while explaining the latest market situation.

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

However, the government borrowed Tk 55 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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