Dhaka, Oct. 8 -- The yield on Bangladesh's two-year treasury bonds dropped below the central bank's policy rate on Tuesday, as banks continued shifting excess liquidity into government securities amid sluggish private credit demand ahead of the national election.

The move reflects a cautious market sentiment and limited lending appetite in the private sector.

The yield on the Bangladesh Government Treasury Bonds (BGTBs) fell to 9.44 per cent from 10.17 per cent, according to the auction results published on Tuesday.

In contrast, the Bangladesh Bank's (BB policy rate, or repo rate, currently stands at 10 per cent.

A similar trend was seen earlier on September 2, when the yield slipped to 10.17 per cent from 10.24 per cent, as banks con...