Written by The Banking Post
Yields on treasury bills fell further on Sunday as banks channelled surplus liquidity into risk-free government securities, reflecting subdued demand for private sector loans.
Auction results showed the cut-off yield on 91-day T-bills dropped to 10.11 per cent from 10.24 per cent earlier. The 182-day bills saw yields decline to 10.22 per cent from 10.28 per cent, while the 364-day bills fell to 10.23 per cent from 10.34 per cent.
The government raised Tk 75 billion through the issuance of T-bills to partly finance its budget deficit.
Market participants said improved liquidity conditions are driving the downward trend. Strong remittance inflows and the central bank’s dollar purchases have eased pressure on the money market, leaving banks with excess funds to invest.
“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 the Bangladesh Bank said.
Private sector credit growth slowed to 6.10 per cent year-on-year in December 2025, down from 6.58 per cent a month earlier, according to central bank data.
Since 13 July last year, the central bank has purchased $4.73 billion directly from banks under the prevailing free-floating exchange rate regime, further injecting liquidity into the banking system.
Currently, four types of T-bills — with maturities of 14, 91, 182 and 364 days — are auctioned regularly to manage the government’s short-term borrowing. In addition, five government bonds with tenures of two, five, 10, 15 and 20 years are traded in the market.
