Yields on the government approved securities increased slightly on Tuesday, as the banks were reluctant to invest their funds in the instruments ahead of the Eid-ul-Fitr.
The cut-off yield, generally known as interest rate, on 91-Day treasury bills (T-bills) rose to 7.08 per cent on the day from 6.90 per cent earlier.
On the other hand, the cut-off yield on 20-Year Bangladesh Government Treasury Bonds (BGTBs) reached 9.20 per cent on the day from 9.03 per cent of the previous auction, according to the auction results issued by Bangladesh Bank (BB).
Talking to the FE, a BB senior official said the yields on both securities were re-fixed in line with the market requirement on the day.
The government borrowed Tk 60 billion instead of pre-auction target Tk 40 billion on Tuesday through issuing the T-bills and bonds to finance budget deficit partly, the central banker explained.
Senior bankers, however, said most of the banks are now unwilling to invest their funds in the government securities as pressure on market is intensifying ahead of the religious festival.
"Higher bank borrowing of the government has pushed up the yields on the securities," a treasury head of a leading private commercial bank (PCB) told the FE.
Currently, three T-bills are being transacted through auctions to adjust government borrowings from the banking system. The T-bills have 91-day, 182-day and 364-day maturity periods.
Furthermore, five government bonds with tenures of 02, 05, 10, 15 and 20 years respectively are traded on the money market.
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