Dhaka, Nov. 5 -- Yields on two-year treasury bonds increased notably on Tuesday as banks showed reluctance to invest their surplus funds in government securities to manage their portfolios more efficiently.

The cut-off yield, generally known as the interest rate, on Bangladesh Government Treasury Bonds (BGTBs) rose to 10.10 per cent from 9.44 per cent earlier, according to auction results.

"Most banks are hesitant to invest their excess liquidity in the bonds, as the volume of such funds has been gradually decreasing," a senior Bangladesh Bank (BB) official told The Financial Express, commenting on the current market scenario.

He also said the comparatively higher bank borrowing of the government for the second quarter of the current f...