The government’s short-term borrowing through treasury bills witnessed a 50 basis points surge to 11%, attributed to heightened demand for bank loans by state authorities. In the recent auction, the government borrowed Tk4,218 crore at a 10.8% interest rate for 91 days, Tk501 crore at 11% for 182 days, and Tk422 crore at 11.20% for 364 days.
The central bank’s data reveals a shift from the previous 10.50% interest rate for 182-day treasury bills. Private commercial banks favor investing in government securities due to capital-free lending, government guarantees, and higher interest rates, prioritizing public sector lending. The trend may elevate private borrowing costs, impacting the overall interest rate scenario.