Written by The Banking Post
Yields on treasury bills (T-bills) edged lower on Sunday as banks continued to channel excess liquidity into risk-free government securities amid sluggish private-sector credit growth and ongoing geopolitical uncertainties.
Bankers said liquidity conditions improved following the disbursement of Tk 31 billion in export cash incentives and Bangladesh Bank’s continued dollar purchases from commercial banks, which helped ease pressure on the money market.
According to auction results, the yield on 91-day T-bills declined to 10.17 percent from 10.19 percent previously. The yield on 182-day T-bills also fell to 10.47 percent from 10.50 percent, while the 364-day T-bill yield eased to 10.65 percent from 10.67 percent.
The government raised Tk 90 billion through the auction of three categories of T-bills to partly finance its budget deficit.
Bankers said many financial institutions are increasingly preferring government securities due to subdued private-sector credit demand.
“Most banks are keen to invest their excess liquidity in government securities as private sector credit demand remains weak due to ongoing geopolitical tensions,” a senior treasury official at a leading private commercial bank said.
Bangladesh Bank data showed private-sector credit growth stood at 6.03 percent year-on-year in February 2026, unchanged from the previous month.
Market insiders also noted that the central bank’s intervention in the foreign-exchange market added liquidity support. Bangladesh Bank purchased $130 million from banks last week to help stabilise the taka-dollar exchange rate amid stronger remittance inflows ahead of Eid-ul-Azha.
Since July 13 last year, the central bank has bought a total of $5.88 billion from commercial banks under the prevailing market-based exchange rate regime, according to central bank data.
Bankers expect the current trend of softer yields on government securities to continue in the coming weeks if liquidity conditions remain comfortable and private-sector borrowing demand stays weak.
Currently, four types of T-bills — with maturities of 14 days, 91 days, 182 days and 364 days — are traded through auctions to manage government borrowing from the banking system.
