SIDDIQUE ISLAM
Yields on treasury bills (T-bills) decreased on Sunday as the central bank purchased an additional US$187.50 million from 14 banks in an effort to maintain stability in the exchange rate.
The cut-off yield, generally known as interest rate, on the 91-Day T-bills fell to 10.42 per cent on the day from 10.52 per cent of the previous level while the yield on 182-day T-bills came down to 10.55 per cent from 10.65 per cent.
Meanwhile, the yield on the 364-day T-bills declined to 10.66 per cent from 10.71 per cent earlier, according to the auction results.
On the day, the government raised Tk 80 billion by issuing three types of T-bills to partially finance its budget deficit.
"Most banks are keen to park their excess liquidity in risk-free securities as private sector credit demand remains subdued ahead of the upcoming national polls," a senior Bangladesh Bank (BB) official told The Financial Express (FE), noting that heightened political uncertainty and cautious lending sentiment have prompted banks to avoid risk exposure.
Meanwhile, private sector credit growth stood at 6.58 per cent year-on-year in November 2025 from 6.23 per cent a month earlier, according to the central bank's latest figures.
Higher inflows of remittances, coupled with the central bank's purchases of US dollars, have helped boost liquidity in the market, contributing to the decline in yields on government securities, according to the central banker.
The central banker also predicted the existing trend of yields on the government securities may continue in the coming weeks.
On Sunday, the central bank purchased $187.50 million more from 14 banks through an interbank spot market auction to help stabilize the exchange rate of the American currency against the Bangladesh Taka.
The amount was bought under the Multiple Price Auction method and the cutoff rate was Tk 122.30 per dollar, according to the central bank officials.
The central bank of Bangladesh has so far bought $3.32 billion from banks directly since July 13 last under the prevailing free-floating exchange rate arrangement, the BB data showed.
"We're purchasing the US dollars from commercial banks to maintain exchange rate stability, a move that helps preserve export competitiveness and supports the sustained inflow of remittances," another senior BB official told The FE in response to a query.
Under the ongoing open market operations, the liquidity positions of several banks-including some under stress-have improved as they sold US dollars to the central bank, the official added, noting that the intervention has helped ease short-term funding pressures in the banking system.
"Such interventions are also contributing to a gradual rebuilding of the country's foreign exchange reserves," the central banker explained.
Meanwhile, Bangladesh's gross foreign exchange (forex) reserves rose to $33.18 billion on January 01 this calendar year from $32.80 billion on December 24 last as per traditional calculation of the central bank.
Under the International Monetary Fund (IMF)'s Balance of Payments International Investment Poisson Manual-six edition, generally known as BMP6, the forex reserves stood at $28.51 billion during the period under review from $28.11 billion.
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