Yields on T-bills fall further

The yields on treasury bills (T-bills) fell further on Sunday as banks preferred to invest their excess liquidity in the risk-free securities.

The cut-off yield, commonly referred to as the interest rate, on the 91-day T-bills declined to 10.33 per cent from the previous level of 10.45 per cent.

However, the yield on 182-day T-bills fell to 10.61 per cent on the day from 10.98 per cent earlier while the yield on 364-day T-bills came down to 10.62 per cent from 10.70 per cent, according to the auction results.

"Some banks are showing interest in investing their excess funds in the short-term securities due to a recent increase in liquidity inflows," a senior official of the Bangladesh Bank (BB) told The Financial Express (FE) while explaining the latest market situation.

He also said the BB's intervention in the market -buying the US dollars from banks through auctions -has contributed to the increased liquidity inflow.

A total of $494 million was purchased by the central bank through three separate auctions over a period of more than a week this month.

Earlier on July 20, the yields on the T-bills dropped below 11 per cent on the same ground.

Meanwhile, the government borrowed Tk60 billion on the day through issuing three-type of T-bills to meet its budget deficit partly.

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

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

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