B Mirror Report: The government has bought back treasury bonds worth Tk 1,716.14 crore before maturity for the first time, aiming to improve liquidity management and make the secondary market for government securities more efficient.

The buyback auction was held on Thursday for two-year treasury bonds issued on November 4, 2024, according to a statement from the Ministry of Finance.

A total of 56 bids worth Tk 2,016.14 crore were submitted at the auction. Of these, bids worth Tk 1,716.14 crore that matched the rates set by the auction committee were accepted. The bonds were repurchased from various state-owned banks that held them.

A buyback refers to the process of repurchasing securities from investors before their maturity date. The government said the initiative would help reduce the pressure of lump-sum repayments at maturity, manage refinancing risks and make public debt repayment schedules more balanced.

The Bangladesh Bank also described the initiative as the first buyback auction of government securities in the country’s securities market, marking the introduction of a new, market-based approach to public debt management.

According to the central bank, the initiative is expected to provide greater flexibility in future financing decisions, improve the maturity structure of government debt and help manage borrowing costs and risks more effectively.

Central bank officials said the bonds were repurchased about one month before maturity. As a result, the government will not have to pay interest for that remaining period, helping reduce its borrowing costs.

The Ministry of Finance said the buyback operation was conducted by Bangladesh Bank on behalf of the Finance Division. The government may arrange similar auctions in the future, depending on market conditions, liquidity, investor demand and the structure of public debt.

The initiative is expected to strengthen government debt management and improve the efficiency of the country’s government securities market.