Written by The Banking Post
Yields on Bangladesh’s treasury bills (T-bills) — particularly those with longer tenures — rose on Sunday as banks became more cautious about locking in funds in government securities ahead of the national elections.
According to the latest auction data, the cut-off yield on 182-day T-bills rose to 10.30% from 10.00%, while the 364-day T-bill yield edged up to 10.04% from 9.99%. In contrast, the 91-day T-bill yield fell slightly to 10.09% from 10.24%, indicating a short-term shift in liquidity preference among investors.
On the day, the government borrowed Tk 75 billion through the issuance of three categories of T-bills to help finance its budget deficit.
A senior Bangladesh Bank official said banks were showing reluctance to invest in longer-tenure T-bills, preferring to maintain liquidity flexibility before the election period. The official added that the current trend of rising yields in government securities may continue in the coming weeks.
A treasury official from a private commercial bank noted that the adjustment in yields represents a market correction aligned with the central bank’s 10% policy (repo) rate.
Currently, four categories of T-bills — with maturities of 14, 91, 182, and 364 days — are auctioned to meet the government’s short-term borrowing needs.
