The yields on treasury bills (T-bills) increased slightly on Sunday as banks expressed unwillingness to invest their excess liquidity in the securities before Eid-ul-Fitr.
The cutoff yield, generally known as interest rate, on the 91-Day T-bills rose to 10.35 per cent from 10.34 per cent of the previous level while the yield on 182-Day T-bills reached 10.84 per cent from 10.55 per cent earlier.
However, the yield on 364-Day T-bills rose to 10.79 per cent on the day from 10.73 per cent earlier, according to the auction results.
"The demand for the T-bills has decreased as banks are now unwilling to invest their excess funds in the government-approved securities before the upcoming Eid-ul-Fitr," a senior treasury official at a leading private commercial bank told the Financial Express (FE).
He also said most of the banks want to manage their funds efficiently before and after the Eid festival.
However, the government borrowed Tk 70 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.
The bills are short-term investment tools issued through auction, conducted by the central bank on behalf of the government.
Earlier on March 04, the yield on Two-Year Bangladesh Government Treasury Bonds (BGTBs) increased significantly on the same ground.
The cut off yield on the BGTBs rose to 11.20 per cent on the day from 10.92 per cent earlier.
Furthermore, five government bonds, with tenures of two, five, 10, 15 and 20 years respectively, are traded on the market.
siddique.islam@gmail.com
