Yields on two types of treasury bills (T-bills) dropped below 10 per cent on Sunday, while the rate on 91-day T-bills remained at 10 per cent, as banks continued to channel excess liquidity into the instruments.
The cut off yield, generally known as interest rate, on the 182-Day T-bills came down to 9.91 per cent, which is below the policy rate, on the day from 10.03 per cent of the previous level while the yield on 364-day T-bills fell to 9.88 per cent on the day from 10.01 per cent earlier
Currently, the policy rate, also known as the repo rate, is 10 per cent.
Earlier on September 16 last, the cut off yield on the 10-Year Bangladesh Government Treasury Bonds (BGTBs) dropped to 9.89 per cent from 10.26 per cent earlier.
However, the yield on 91-Day T-bills came down to 10 per cent on the day from 10.03 per cent earlier, according to the auction results.
"Most banks are willing to invest their excess funds in the risk-free government securities, following lower private sector credit demand ahead of the general election," a senior Bangladesh Bank (BB) official told The Financial Express (FE) while explaining the current market situation.
Meanwhile, the growth in private sector credit stood at 6.52 per cent in July 2025 on a year-on-year basis, from 6.49 per cent a month ago, indicating weakening business confidence and tighter lending conditions.
The government's reduced borrowing requirement has also contributed to the decline in the yield on the government securities, according to the central banker.
However, the government borrowed Tk 65 billion on the day through issuing three-type of T-bills to meet its budget deficit partly.
Currently, four T-bills are transacted through auctions 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 in the market.
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