The government increased its reliance on short-term borrowing in November, issuing treasury bills worth Tk 31,289 crore, a 4.30 per cent rise from the previous month, while market yields remained clustered around the 10 per cent level amid tight liquidity.
Bangladesh Bank’s Money Market Dynamics report shows the borrowing was executed through four auctions, with a clear preference for shorter maturities. Of the total issuance, Tk 14,000 crore came from 91-day bills, Tk11,289 crore from 182-day bills, and Tk6,000 crore from 364-day bills, highlighting the government’s continued tilt towards short-dated instruments.
Pricing across maturities stayed elevated but stable. The weighted average yield stood at 9.99 percent for 91-day bills, 10.03 per cent for 182-day bills and 10.01 per cent for 364-day bills, indicating that markets have largely settled into a high-rate environment shaped by restrictive monetary policy.
Beneath the surface, however, auction dynamics revealed diverging expectations along the yield curve. The 91-day cut-off rate declined steadily from 10.24 per cent in the first auction to 10.07 percent by the third, before edging up to 10.14 per cent in the final auction, leaving the month-end rate 10 basis points lower than where it began.
The 182-day segment saw sharper volatility. The cut-off rate jumped by 30 basis points in the second auction to 10.30 percent, signalling temporary pressure on demand, before easing in subsequent auctions to close the month at 10.14 per cent.
In contrast, investors demanded progressively higher compensation at the longer end. The 364-day cut-off rate climbed throughout November, rising from 9.99 per cent to 10.25 per cent, pointing to a higher term premium as inflation risks and policy uncertainty weighed on longer commitments.
Bangladesh Bank data show that Tk27,620 crore of treasury bills matured during the month, resulting in a net issuance of Tk3,669 crore, suggesting that a large share of fresh borrowing went towards rolling over existing obligations rather than financing entirely new spending.
The November auctions underline a familiar tension in the money market: while the government continues to rely on short-term bills to manage financing needs, investors remain cautious on longer maturities, keeping upward pressure on one-year yields – a pattern likely to persist as long as liquidity stays tight and the policy stance remains restrictive.
