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Yields on treasury bills (T-bills) declined further on Sunday as banks channelled surplus liquidity into risk-free government securities, reflecting subdued private sector credit demand.
The downward movement in yields comes amid improved liquidity conditions, supported by strong remittance inflows and central bank dollar purchases, which have reduced pressure on the money market.
The cut-off yield, commonly known as the interest rate, on 91-day T-bills fell to 10.11 per cent on Sunday, down from 10.24 per cent previously. The yield on 182-day T-bills declined to 10.22 per cent from 10.28 per cent.
Meanwhile, the yield on 364-day T-bills dropped to 10.23 per cent from 10.34 per cent earlier, according to auction results.
On 8 February, yields on the three types of T-bills had also declined on similar grounds.
The government raised Tk 75 billion on the day by issuing T-bills to partially finance its budget deficit.
"A good number of banks are keen to invest their excess liquidity in government securities as private sector credit demand remains low due to uncertainty surrounding the just-concluded national election," a senior official of Bangladesh Bank told The Financial Express, explaining the latest market situation.
Private sector credit growth stood at 6.10 per cent year-on-year in December 2025, down from 6.58 per cent a month earlier, according to the central bank's latest data.
Higher remittance inflows, along with the central bank's purchases of US dollars, have also helped ease liquidity conditions in the banking system, exerting downward pressure on yields of government securities, the official added.
Since 13 July last year, the central bank has purchased $4.73 billion directly from banks under the prevailing free-floating exchange rate regime, according to Bangladesh Bank data.
Currently, four types of T-bills with maturities of 14 days, 91 days, 182 days and 364 days are auctioned to manage the government's short-term 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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