Interest rates on T-bills drop further
Monday, 27 April 2009
FE Report
The interest rate on treasury bills (T-bills) dropped further Sunday, as commercial banks, having excess liquidity, rushed to offer bids in the auction, treasury officials said.
The yield, generally known as interest rate, on 91-day T-bill fell to the range of 4.98-5.00 per cent Sunday from 5.89-6.40 per cent of the previous auction, held on April 19.
Besides, the yield on 182-day T-bill came down to 6.00-7.20 per cent from 7.90-8.09 per cent of the previous auction, held on April 12.
"Most of the commercial banks have quoted lower interest rates to invest their excess liquidity in the risk-free government-approved securities to minimise cost of funds," a senior treasury official of a private commercial bank told the FE Sunday.
The overall excess liquidity with the commercial banks, a record Tk 215 billion registered in February, grew by 65 per cent from that of the corresponding period of last year. The figure was Tk 130 billion in February last year, according to the latest estimation.
The demand for such securities has sharply risen mainly due to lower interest rates on call money in the inter-bank market, they added.
The call money rate mainly ranged between 0.25 per cent and 10 per cent on the day unchanged from the previous level. But most of the deals were settled at rates between 0.50 per cent and 1.00 per cent on the day.
On March 11, the BB slashed its interest rate on repo and reverse repo to mitigate the impact of ongoing global financial recession through boosting fresh investment.
After slashing interest rates on repurchase agreement (repo) and reverse repo, the interest rates on T-bills fell on April 5, following a spurt in investment in government approved securities.
Currently, three T-bills are being transacted through auctions to adjust the government borrowings from the banking system. The T-bills have 91-day, 182-day and 364-day maturity periods.
On the other hand, four government bonds - 5-year, 10-year, 15-year and 20-year - are being traded in the markets.
The interest rate on treasury bills (T-bills) dropped further Sunday, as commercial banks, having excess liquidity, rushed to offer bids in the auction, treasury officials said.
The yield, generally known as interest rate, on 91-day T-bill fell to the range of 4.98-5.00 per cent Sunday from 5.89-6.40 per cent of the previous auction, held on April 19.
Besides, the yield on 182-day T-bill came down to 6.00-7.20 per cent from 7.90-8.09 per cent of the previous auction, held on April 12.
"Most of the commercial banks have quoted lower interest rates to invest their excess liquidity in the risk-free government-approved securities to minimise cost of funds," a senior treasury official of a private commercial bank told the FE Sunday.
The overall excess liquidity with the commercial banks, a record Tk 215 billion registered in February, grew by 65 per cent from that of the corresponding period of last year. The figure was Tk 130 billion in February last year, according to the latest estimation.
The demand for such securities has sharply risen mainly due to lower interest rates on call money in the inter-bank market, they added.
The call money rate mainly ranged between 0.25 per cent and 10 per cent on the day unchanged from the previous level. But most of the deals were settled at rates between 0.50 per cent and 1.00 per cent on the day.
On March 11, the BB slashed its interest rate on repo and reverse repo to mitigate the impact of ongoing global financial recession through boosting fresh investment.
After slashing interest rates on repurchase agreement (repo) and reverse repo, the interest rates on T-bills fell on April 5, following a spurt in investment in government approved securities.
Currently, three T-bills are being transacted through auctions to adjust the government borrowings from the banking system. The T-bills have 91-day, 182-day and 364-day maturity periods.
On the other hand, four government bonds - 5-year, 10-year, 15-year and 20-year - are being traded in the markets.