Yields on T-bills fall slightly

The yields on two types of treasury bills (T-bills) fell slightly on Sunday as banks expressed willingness to invest their excess liquidity in short-term securities.

The cut off yield, generally known as interest rate, on the 91-day T-bills came down to 11.45 per cent on the day from 11.48 per cent earlier while the yield on 364-day T-bills fell to 11.88 per cent from 11.89 per cent.

However, the yield on 182-day T-bills remained unchanged at 11.72 per cent on the day from the previous level, according to the auction results.

"Lower borrowing needs of the government is pushing down the yields on government securities including T-bills," a senior official of the Bangladesh Bank (BB) told the FE while explaining the falling trend of the T-bills.

Despite the falling trend of the yields, banks, individuals and institutional investors prefer to invest their funds in the securities for minimising risks, the central banker explained.

The government borrowed Tk 113.45 billion instead of the pre-auction targeted Tk 85 billion through issuing the treasury bonds on the day to meet its budget deficit partly.

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

The bills are short-term investment tools issued through auction, conducted by the central bank on behalf of the government.

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

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