Written by The Banking Post
The yields on treasury bills (T-bills) fell further on Sunday as banks continued to channel excess liquidity into risk-free government securities.
According to auction results, the cut-off yield on the 91-day T-bills dropped to 10.14 per cent, down from 10.20 per cent earlier. The yield on the 182-day T-bills fell to 10.35 per cent from 10.39 per cent, while the 364-day T-bills eased to 10.43 per cent from 10.50 per cent.
The government raised Tk 55 billion through the issuance of the three T-bill tenors to partly finance its budget deficit.
“A section of banks is showing greater interest in short-term securities, driven by a recent increase in liquidity inflows,” said a senior official of the Bangladesh Bank (BB).
The central bank’s intervention in the foreign exchange market has contributed to this liquidity surge. On Thursday, the BB purchased an additional US$176.50 million from 15 banks through an auction to stabilise the exchange rate.
Market insiders expect the declining trend in T-bill yields to persist in the coming weeks.
Currently, four types of T-bills — with 14-day, 91-day, 182-day, and 364-day maturities — are auctioned to adjust government borrowing from banks. In addition, the government trades five bonds in the market, with tenures of two, five, 10, 15, and 20 years.
