The yields on treasury bills (T-bills) continued to show an upward trend on Sunday as banks expressed unwillingness to invest their excess liquidity in the securities.
The cut off yield, generally known as interest rate, on the 91-Day T-bills rose to 11.24 per cent from 10.90 per cent of the previous level while the yield on 182-Day T-bills reached 11.45 per cent from 11.25 per cent.
However, the yield on 364-Day T-bills rose to 11.75 per cent on the day from 11.30 per cent earlier, according to the auction results.
"Most banks are reluctant to invest their excess funds in the government-approved securities as liquidity pressure continues to persist in the market," a senior treasury official at a leading private commercial bank (PCB) told The Financial Express (FE) while explaining the latest market situation.
He also predicted that the ongoing upward trend of yields on T-bills may continue in the coming months.
On the other hand, a senior official of the Bangladesh Bank (BB) disagreed with the private banker's prediction saying that the yields on T-bills may fall slightly in the coming weeks.
"The inflow of funds may increase in the banking system after the Eid-ul-Fitr festival," the central banker predicted.
However, the government borrowed Tk 90 billion on the day through issuing three types of T-bills to partially meet its budget deficit.
Currently, four T-bills are transacted through auction to adjust government borrowings from the banking system. The T-bills have 14-day, 91-day, 182-day and 364-day maturity periods.
Furthermore, five government bonds, with tenures of two, five, 10, 15 and 20 years respectively, are traded on the market.
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