Yields on T-bills fall below policy rate

Yields on treasury bills (T-bills) fell below the central bank's policy rate on Sunday, as banks opted to park excess liquidity in the government securities amid sluggish private credit demand before the national election.

The cut off yield, generally known as interest rate, on the 91-Day T-bills came down to 9.91 per cent on the day from 10.00 per cent of the previous level while the yield on 182-day T-bills fell to 9.79 per cent on the day from 9.91 per cent earlier

However, the yield on 364-Day T-bills came down to 9.69 per cent on the day from 9.88 per cent earlier, according to the auction results. Currently, the central bank's policy rate, also known as the repo rate, is 10 per cent.

However, the government borrowed Tk 65 billion on the day through issuing three-type of T-bills to meet its budget deficit partly. On September 23, the yields on two-type of treasury bonds dropped below the central bank's policy rate on the same ground. The yield on the 15-Year Bangladesh Government Treasury Bonds (BGTBs) came down to 9.67 per cent on the day from 10.28 per cent earlier while the yield on the 20-Year BGTBs fell to 9.70 per cent from 10.38 per cent.