T-bill yields see mixed trend

The yields on treasury bills (T-bills) showed a mixed trend on Sunday as banks appeared reluctant to invest their excess liquidity in risk-free government securities ahead of the year-end closing.

The cut-off yield, generally regarded as the interest rate, on 91-day T-bills rose to 10.14 per cent from 10.07 per cent, while the 182-day T-bill yield edged slightly down to 10.14 per cent from 10.15 per cent.

Meanwhile, the yield on 364-day T-bills increased to 10.24 per cent from 10.10 per cent, according to auction results.

Despite the varied movements in yields, the government raised Tk 75 billion by issuing three types of T-bills to help finance its budget deficit.

"Most banks are reluctant to park their excess funds in T-bills ahead of the year-end closing on 31 December," a senior Bangladesh Bank (BB) official told The Financial Express, explaining the latest market dynamics.

The central bank official also indicated that the current yield trends on government securities may persist in the coming weeks.

At present, four types of T-bills are auctioned to manage government borrowing from the banking system.

These have maturity periods of 14, 91, 182 and 364 days. In addition, five government bonds - with tenures of two, five, 10, 15 and 20 years - are traded in the market.

siddique.islam@gmail.com