Yields on T-bills fall further

The yields on three types of treasury bills (T-bills) fell further on Sunday as banks expressed willingness to invest their excess liquidity in the short-term securities.
The cut-off yield, generally known as interest rate, on the 91-day T-bills came down to 11.49 per cent on Sunday from 11.51 per cent of the previous level while the yield on 182-day T-bills fell to 11.72 per cent from 11.75 per cent earlier.
The yield on 364-day T-bills also came down to 11.8999 per cent on the day from 11.9200 per cent of the previous-day level, according to the auction results.
"Lower credit demand, particularly from the private sector, and higher inflow of remittances are pushing down the yields on the government securities," a senior treasury official of a leading private commercial bank told the FE while explaining the falling trend of yields on T-bills.
The treasury official also predicts that the ongoing falling trend of the government securities may continue in the near future.
On the day, the government borrowed around Tk 104 billion instead of the pre-auction target of Tk 75 billion through issuing the treasury bonds to partly meet its budget deficit.
Currently, four 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.
The bills are short-term investment tools issued through auction, conducted by the central bank on behalf of the government.
Furthermore, five government bonds, with tenures of two, five, 10, 15 and 20 years respectively, are traded on the market.

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