5-yr bond yield rises

FE REPORT | Published: December 09, 2025 23:17:27

The yield on five-year treasury bonds edged up on Tuesday, signalling higher government borrowing from the banking system in the coming months to help finance the budget deficit, officials said.
The cut-off yield, commonly referred to as interest rate, on Bangladesh Government Treasury Bonds (BGTBs) rose to 10.84 per cent, up from 10.79 per cent at the previous auction, according to official results.
Despite the increase in yields, the government raised Tk 30 billion on the day through the issuance of BGTBs to partially meet its budgetary shortfall.
"Most banks were not keen to invest their excess funds in BGTBs after the government announced additional borrowing from the banking system to meet its expenditure needs," a senior Bangladesh Bank (BB) official told The Financial Express.
On Sunday, the central bank issued a special auction notice to borrow Tk 50 billion through the issuance of 91-day treasury bills (T-bills) for the same purpose.
The central banker also projected that the current upward trend in government securities yields may persist in the coming weeks.
At present, five government bonds - with maturities of two, five, 10, 15 and 20 years - are traded in the market.
In addition, four treasury bills are issued through auctions to manage government borrowing from the banking system. These T-bills have maturity periods of 14 days, 91 days, 182 days and 364 days.
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