Dhaka, July 5 -- Interest rates on treasury bills and bonds have risen sharply, reaching as high as 12 per cent, following the Bangladesh Bank's discontinuation of its 28-day repo facility - a move that has tightened liquidity within the banking system and made financial institutions more cautious about investing in government securities.
According to recent data from the Bangladesh Bank, the yield on treasury bills rose to 12 per cent during the auction held on 29 June, up from 11 per cent in April. Meanwhile, the yield on five-year treasury bonds surged to 12.4 per cent in the 8 April auction, compared to 11.5 per cent in mid-March.
The central bank's decision to phase out the 28-day repo facility-effective from 10 April-has significant...