Yields on Bangladesh’s Treasury bills (T-bills) edged marginally lower on Sunday as improved liquidity conditions, bolstered by central bank intervention in the foreign exchange market, encouraged banks to channel surplus funds into government securities.
At the weekly auction, the government raised Tk 70 billion through the issuance of three maturities of T-bills, providing partial financing for the budget deficit. Auction results showed a modest softening of yields across most tenors, reflecting subdued credit demand from the private sector and a preference among banks for risk-free investments.
The cut-off yield on the 91-day T-bill slipped to 10.52 per cent from 10.53 per cent previously, while the 182-day bill remained broadly unchanged at 10.65 per cent. The yield on the 364-day T-bill declined to 10.71 per cent from 10.72 per cent at the prior auction.
Market participants attributed the easing trend to surplus liquidity created after the Bangladesh Bank (BB) purchased an additional US$115 million from three commercial banks through an interbank spot market auction. The transaction, conducted under the Multiple Price Auction method, cleared at a cut-off rate of Tk 122.30 per US dollar.
A senior treasury official at a leading private commercial bank noted that banks are increasingly parking excess liquidity in government paper as loan demand remains weak ahead of the forthcoming national elections. “With private credit growth slowing and risk appetite subdued, T-bills remain an attractive, risk-free option,” the official said.
Indeed, private sector credit growth eased to 6.23 per cent year-on-year in October 2025, down from 6.29 per cent a month earlier, signalling cautious business sentiment and tighter lending conditions. The BB’s ongoing dollar purchases have injected additional taka liquidity into the banking system, reinforcing downward pressure on yields.
Since July 13, under the prevailing free-floating exchange rate regime, the central bank has purchased a cumulative US$3.05 billion directly from banks. According to BB officials, these interventions aim to stabilise the exchange rate, support export competitiveness, and sustain remittance inflows, while also easing liquidity strains at some banks, including weaker institutions.
The impact has also been visible in the country’s foreign exchange reserves. Bangladesh’s gross reserves rose to US$32.80 billion on December 24 from US$32.72 billion two days earlier under the central bank’s traditional accounting. Measured under the IMF’s BPM6 methodology, reserves increased to US$28.11 billion from US$28.04 billion over the same period.
Bankers expect the current yield environment to persist in the near term, provided liquidity remains ample and private credit demand stays muted.
Key figures at a glance
| Indicator | Latest | Previous |
|---|---|---|
| 91-day T-bill yield | 10.52% | 10.53% |
| 182-day T-bill yield | 10.65% | 10.65% |
| 364-day T-bill yield | 10.71% | 10.72% |
| T-bills issued | Tk 70 bn | — |
| BB dollar purchase (day) | US$115 m | — |
| Cumulative BB purchases (since Jul 13) | US$3.05 bn | — |
| Gross forex reserves (traditional) | US$32.80 bn | US$32.72 bn |
| Forex reserves (IMF BPM6) | US$28.11 bn | US$28.04 bn |
Overall, the combination of cautious lending, ample liquidity, and active central bank intervention continues to shape a softer yield outlook in the government securities market.