Secondary trading of the government's fixed income securities declined drastically in the outgoing calendar year, according to the latest statistics of the central bank.
It showed that the value of the secondary trading of treasury bills and treasury bonds fell to Tk 120.40 billion in January-November period of 2018 which was Tk 243.27 billion in the same period of 2017.
Data of December 2018 is yet to be available. Nevertheless, it is clear from the 11 months data that secondary transaction of government's tradable securities declined sharply.
The total amount of the secondary transactions of these securities was Tk 282.91 billion in the past year. The amount was Tk 514.08 billion in 2016.
Treasury bills and bonds are short-term and long-term fixed income government securities and also tradable in the financial market.
Banks and financial institutions purchase these securities through regular auctions and also trade the purchased debt instruments among themselves later. The former one is primary market activity and later one is secondary market.
In Bangladesh, primary dealers (PD) are authorised to take part in the auctions conducted by the central bank. Other institutions and individuals can also participate in auction but through the PDs. At present 21 banks are performing as PDs.
Besides these tradable securities, there are other fixed income securities but not tradable in the market. These are the savings certificates.
By selling all these securities, the government borrow from the market which is known as non-bank borrowing.
Moreover, the outgoing year sees no issuance of treasury-bills and treasury-bonds.