BM Desk : Due to commercial banks’ unwillingness to allocate excess liquidity to long-term government assets in favor of improving their portfolio management techniques, the yield on10-year Bangladesh Government Treasury Bonds (BGTBs) jumped on Tuesday.

According to auction results, the cut-off yield on 10-year BGTBs rose sharply to 10.39 per cent, up from 9.99 per cent previously. Despite the uptick in rates, the government successfully raised Tk 25 billion through the bond issuance to help finance its budget deficit.

A senior treasury official at a leading private commercial bank told The Financial Express that banks were increasingly cautious about locking funds into long-duration bonds. “Most banks are reluctant to park their excess funds in the long-term securities for managing their portfolios efficiently,” the official said, highlighting a growing preference for shorter-term or more flexible investment options.

A central bank official noted that the current upward trend in yields on government securities is likely to persist in the coming weeks, reflecting both market sentiment and cautious liquidity management by banks.

Bangladesh’s debt market currently includes five types of government bonds with maturities of 2, 5, 10, 15 and 20 years. In addition, four Treasury bills—with 14-day, 91-day, 182-day and 364-day tenures—are regularly traded through auctions to manage short-term government borrowing from the banking system.

Market analysts suggest that the rising yields could signal tightening liquidity conditions or a shift in banks’ investment strategies, potentially impacting borrowing costs across the economy.