Secondary trading of treasury bills, bonds increases three times in FY20

Secondary trading of the marketable fixed-income government securities jumped by three times in the last fiscal year (FY20), reflecting higher bank borrowing by the government.

Statistics available with the Bangladesh Bank showed that the value of the secondary transaction of treasury bills and bonds stood at Tk 558.89 billion in FY20, which was Tk 183.09 billion in FY19.

The last year's secondary trading of these bills and bonds was the highest in the last four years.

Meanwhile, the government’s net borrowing from the banking system increased by around 109 percent to Tk 722.46 billion in the last fiscal year from Tk 345.87 billion in the same period of the previous fiscal (FY19).

Treasury bills are short-term fixed income government securities while treasury bonds are long-term in nature.

Bangladesh Bank statistics also showed that the secondary trading of treasury bills and bonds recorded Tk 675.13 billion in FY16, which came down to Tk 400.58 billion in FY17. The transaction further dropped to Tk 153.34 billion in FY18.

Currently there are treasury bills with three maturity periods. These are 91-day, 182-day and 384-day.

There are also treasury bonds with five maturity periods: 2-year, 5-year, 10-year, 15-year and 20-year.

The central bank statistics also showed that the weighted average yields on all treasury bonds declined in the last fiscal year.

While yields on the 91-day and 364-day treasury bills increased slightly during the period under review, yields on the 182-day bill declined marginally.