Written by The Banking Post
The government borrowed Tk 20 billion on Tuesday by issuing five-year Bangladesh Government Treasury Bonds (BGTBs), as yields on the instruments fell further amid increased demand from banks.
The cutoff yield on the bonds dropped to 10.03 per cent, down from 10.28 per cent at the previous auction, Bangladesh Bank data showed. Earlier on August 12, the rate had slipped from 11.05 per cent to 10.28 per cent.
A senior central bank official said banks are showing more appetite for government securities as liquidity inflows rise in the market. Bangladesh Bank’s dollar purchases from banks—$265 million on Tuesday alone—have injected additional liquidity while helping stabilise the exchange rate.
The banker noted that yields on government securities could continue trending downward in the coming weeks. Currently, five types of government bonds, with maturities ranging from two to 20 years, and four categories of treasury bills are traded to help finance the budget deficit.
