T-bill yields mixed amid weak credit demand

Yields on treasury bills showed a mixed trend on Sunday as banks channelled excess liquidity into short-term government securities, reflecting subdued private sector credit demand and cautious market sentiment.
The shift in investment preference comes amid ongoing geopolitical uncertainties and slowing credit growth, prompting banks to favour safer, shorter-tenure instruments over longer-term exposure.
The cut-off yield, generally known as the interest rate, on 91-day T-bills fell to 9.78 per cent from 9.89 per cent earlier, while the yield on 182-day T-bills declined to 9.97 per cent from 10.00 per cent.
On the other hand, the yield on 364-day T-bills remained unchanged at 10.00 per cent, according to the auction results.
On the day, the government raised Tk 82.50 billion by issuing three types of T-bills to partially finance its budget deficit.
"Most banks preferred to invest their excess liquidity in risk-free government securities due to lower private sector credit demand amid ongoing geopolitical tensions," a senior official of the Bangladesh Bank (BB) told The Financial Express (FE).
Meanwhile, private sector credit growth fell to 6.03 per cent year-on-year in January 2026 from 6.10 per cent a month earlier, according to the central bank's latest figures.
"Banks deposited Tk 115 billion with the central bank under the Standing Deposit Facility (SDF) on Sunday to manage their funds efficiently," the official said, explaining the liquidity situation in the market.
He also predicted that the current trend in yields on government securities may continue in the coming weeks.
Currently, four T-bills are traded through auctions to manage government borrowings from the banking system. These instruments have maturities of 14 days, 91 days, 182 days and 364 days.
In addition, five government bonds with tenures of two, five, 10, 15 and 20 years are traded in the market.

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