Yields on two BGTBs jump

The yields on two types of long-term treasury bonds jumped on Tuesday as banks showed reluctance to invest their excess liquidity in the securities ahead of the Eid-ul-Fitr festival.

The cut off yield, generally known as interest rate, on the 15-Year Bangladesh Government Treasury Bonds (BGTBs) rose to 12.28 per cent on the day from 11.36 per cent earlier while the yield on the 20-Year BGTB stood at 12.54 per cent from 12.05 per cent, according to the auction results.

"Demand for the BGTBs dropped significantly as banks are unwilling to invest their liquidity in the securities ahead of the Eid festival," a senior official of the Bangladesh Bank (BB) told The Financial Express (FE) in response to a query.

He also predicted that the yields on the long-term securities may fall slightly after the Eid vacation.

The government borrowed Tk 30 billion through issuing the BGTBs on the day to partially meet its budget deficit.

Earlier on March 18 last, the yield on 10-Year BGTB crossed 12 per cent on the same ground.

The cut-off yield on the BGTB rose to 12.05 per cent on the day from 10.32 per cent earlier.

Currently, five government bonds, with tenures of two, five, 10, 15 and 20 years respectively, are traded on the market.

On the other hand, four treasury bills (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.

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