Yields on T-bills fall slightly

Yields on treasury bills (T-bills) fell slightly 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 11.61 per cent on the day from 11.64 per cent of the previous level while the yield on 182-Day T-bills fell to 11.80 per cent from 11.87 per cent from earlier level.

The yield on 364-Day T-bills came down to 11.81 per cent on the day from 11.90 per cent earlier, according to the auction results.

"Most banks are now interested in investing their excess funds in the government securities, as liquidity inflow is increasing in the market," a senior official of the Bangladesh Bank (BB) told The Financial Express (FE).

A higher inflow of inward remittances, along with the central bank's purchase of US dollars from the market, is contributing to increased liquidity in the market, the central banker explained. He also predicted that the existing trend of yields on T-bills may continue in the coming weeks.

Meanwhile, the government borrowed Tk 75 billion on the day through issuing three types of T-bills to partly meet its budget deficit.

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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