Written by The Banking Post
Yields on treasury bills showed a mixed trend on Sunday as banks continued to channel excess liquidity into short-term government instruments amid sluggish private sector credit demand.
The cut-off yield on 91-day T-bills declined to 9.78 per cent from 9.89 per cent, while the 182-day yield eased to 9.97 per cent from 10.00 per cent. However, the 364-day yield remained unchanged at 10.00 per cent, according to auction results.
The government raised Tk 82.50 billion through the issuance of these securities to partly finance its budget deficit.
Market insiders say banks are increasingly favouring risk-free assets as lending appetite weakens. “Most banks preferred to invest their excess liquidity in government securities due to lower private sector credit demand amid ongoing geopolitical tensions,” said a central bank official.
Private sector credit growth reflects the slowdown, slipping to 6.03 per cent year-on-year in January 2026 from 6.10 per cent a month earlier.
At the same time, banks placed Tk 115 billion with the central bank under the Standing Deposit Facility (SDF), signalling ample liquidity in the system.
Analysts expect the cautious stance to persist in the coming weeks, with banks likely to continue prioritising short-term, low-risk instruments over longer-term lending amid economic uncertainty.
