T-bill yields rise ahead of year-end closing

Yields on treasury bills (T-bills), particularly long-term ones, rose on Sunday as banks appeared reluctant to park excess liquidity in government securities ahead of the year-end closing.

The cut-off yield on 91-day T-bills remained unchanged at 10.55 per cent, while the yield on 182-day T-bills rose to 10.57 per cent from 10.21 per cent. Meanwhile, the yield on 364-day T-bills edged up slightly to 10.70 per cent from 10.69 per cent, according to auction results.

The government borrowed Tk 70 billion on the day by issuing the three types of T-bills to partly meet its budget deficit.

"Most banks are reluctant to park excess funds in longer-term T-bills -- particularly the 182-day and 364-day -- ahead of the December 31 year-end closing," a senior Bangladesh Bank (BB) official told The Financial Express, explaining the latest market situation.

He added that banks are managing their portfolios cautiously ahead of the national election scheduled for February 12, 2026. The central banker also predicted that the current trend in T-bill yields may continue in the coming weeks.

Currently, four T-bills are transacted through auctions to manage government borrowings from the banking system, with maturities of 14 days, 91 days, 182 days, and 364 days.

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

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