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, generally known as interest rate, on the 91-Day T-bills came down to 10.14 per cent on the day from 10.20 per cent of the previous level while the yield on 182-day T-bills fell to 10.35 per cent on the day from 10.39 per cent earlier.

However, the yield on 364-Day T-bills came down to 10.43 per cent on the day from 10.50 per cent earlier, according to the auction results.

The government borrowed Tk 55 billion on the day by issuing the three types of T-bills to meet its budget deficit partly.

"A section of banks is now showing interest in investing their excess funds in short-term securities, driven by a recent increase in liquidity inflows into the market," a senior official of the Bangladesh Bank (BB) told The Financial Express (FE) while explaining the latest market situation.

Market interventions by the central bank, through purchasing American dollars from banks, have helped increase liquidity inflows into the market, the central banker explained.

The central bank purchased an additional US$176.50 million from 15 banks through an auction on Thursday, as part of its ongoing intervention in the foreign exchange market to maintain the exchange rate stability.

The BB official also predicted that the existing trend of yields on the T-bills might continue in the coming weeks.

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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