Longer-term T-bill yields edge higher

Yields on longer-term treasury bills (T-bills) edged up on Sunday as banks remained reluctant to lock in excess liquidity ahead of the year-end closing and the upcoming national election.

The cut-off yield, or interest rate, on the 182-day T-bills rose to 10.65 per cent from 10.57 per cent at the previous auction, while the yield on the 364-day T-bills increased slightly to 10.72 per cent from 10.70 per cent.

In contrast, the yield on the 91-day T-bills eased to 10.53 per cent from 10.55 per cent earlier, according to the auction results.

The government borrowed Tk 70 billion on the day through the issuance of the three T-bill tenors to partially meet its budget deficit.

"Most banks are reluctant to invest funds in longer-term T-bills, particularly the 182-day and 364-day instruments, ahead of the year-end closing on December 31," a senior Bangladesh Bank (BB) official told The Financial Express (FE), explaining the latest market developments.

He said banks are also adopting a cautious portfolio strategy to avoid potential risks in the run-up to the national election scheduled for February 12, 2026. The central banker added that the prevailing trend in yields on government securities is likely to persist in the coming weeks.

Currently, four types of T-bills - 14-day, 91-day, 182-day and 364-day -are auctioned to manage government borrowing from the banking system.

In addition, five government bonds with maturities of two, five, 10, 15 and 20 years are actively traded in the market.

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