Yield rates on two BGTBs fall further

The yields on two types of long-term treasury bonds fell further on Tuesday as banks opted to invest their excess liquidity in the risk-free instruments.

The cut-off yield, generally known as interest rate, on the 15-Year Bangladesh Government Treasury Bonds (BGTBs) declined to 10.28 per cent on the day from the previous rate of 10.48 per cent while that of 20-Year BGTBs decreased to 10.30 per cent from 10.55 per cent, according to the auction results.

Earlier on July 29 last, the yield rate on the 15-Year BGTBs fell to 10.48 per cent from 12.59 per cent earlier and that of the 20-Year BGTBs came down to 10.55 per cent from 12.49 per cent on the same ground.

However, the government borrowed Tk 20 billion on the day through issuing the BGTBs to help finance its budget deficit.

"Higher inflow of liquidity along with the government's lower demand for funds helps push down the yields on BGTBs," a senior official at the Bangladesh Bank (BB) told The Financial Express (FE).

He also said lower credit demand from the private sector ahead of the general elections has also contributed to the decline in the yields on the government securities.

Meanwhile, the growth in private sector credit dropped to 6.49 per cent in June 2025 on a year-on-year basis, from 7.17 per cent in May, indicating a weakening business confidence and tighter lending conditions.

The BB official also predicted that the downward trend in the yields on the government securities may continue in the coming weeks.

Currently, five government bonds, with the tenures of two, five, 10, 15 and 20 years, are traded on the market.

Besides, four treasury bills (T-bills) are also transacted through auction to adjust government's borrowings from the banking system.

The T-bills have 14-day, 91-day, 182-day and 364-day maturity periods.

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