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Bangladesh's treasury-bill yields displayed a mixed trend on Sunday, with short- and medium-term rates easing but the longest tenure edging higher, as banks increasingly opted to park surplus liquidity in government securities amid improved money market inflows.
The cut-off yield, commonly referred to as the interest rate, on the 91-day T-bills fell to 10.20 per cent from 10.24 per cent previously, while the yield on 182-day T-bills dropped to 10.39 per cent from 10.50 per cent.
In contrast, the yield on 364-day T-bills inched up to 10.50 per cent from 10.39 per cent, according to auction results.
"Some banks are showing interest in investing their excess funds in the short-term securities, driven by a recent increase in liquidity inflows into the market," a senior official of the Bangladesh Bank (BB) told The Financial Express, explaining the latest market dynamics.
Liquidity inflows have been buoyed by the central bank's interventions in the foreign exchange market, particularly through purchases of US dollars from commercial banks.
On Sunday, BB bought an additional US$83 million from 11 banks via auction as part of its ongoing efforts to stabilise the exchange rate.
The central banker also forecast that the current pattern of treasury bill yields is likely to persist in the coming weeks.
On the same day, the government borrowed Tk 55 billion through the issuance of three types of T-bills to help cover part of its budget deficit.
At present, four T-bill maturities - 14-day, 91-day, 182-day and 364-day - are auctioned to adjust government borrowing from the banking system.
In addition, five government bonds with tenures of two, five, 10, 15 and 20 years are traded in the market.
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