Government treasury bills, commonly known as T-bills, have surpassed 11%, exceeding bank deposit interest rates.

This surge is attributed to the government’s increased internal borrowing from financial institutions and individuals after the suspension of loans from the central bank.

In auctions on January 29, the government raised substantial amounts through T-bills, with Tk 40.98 billion from 91-day bills, Tk 4.13 billion from 182-day bills, and Tk 13.57 billion from 364-day securities, according to central bank data.

The Bangladesh Bank halted money printing for the government in the current financial year to curb inflation. As a result, the government turned to accelerated borrowing from financial institutions and individuals, making T-bills an automatic choice due to their global appeal as a relatively secure investment.

Between July 1 and January 25 of this fiscal year, the government borrowed Tk 293.53 billion from scheduled banks against T-bills and bonds, repaying Tk 317.37 billion to the central bank, according to BB data.

With commercial banks offering 6 to 9% interest on fixed deposit products, T-bills have become more appealing, especially considering the inflation rate exceeding 9% since March.

This shift towards T-bills poses a challenge for banks to mobilize deposits. Some depositors are withdrawing funds from banks to invest in T-bills due to the more attractive interest rates.