Dhaka, May 21 -- The yield on 10-Year Bangladesh Government Treasury Bonds (BGTBs) dropped significantly on Tuesday, as banks expressed eagerness to invest their excess liquidity in the risk-free securities.

The cut-off yield, generally known as interest rate, on the BGTBs fell to 11.88 per cent on the day from 12.48 per cent earlier, according to the auction results.

"Most banks prefer to invest their excess funds in long-term securities rather than short-term ones, anticipating a decline in yields on government securities in the coming months," a senior official of the central bank told The Financial Express (FE).

He also said pressure on the government's bank borrowing may ease in the near future, as inflows of funds from overseas s...