The yield on Bangladesh’s five-year government treasury bonds (BGTBs) surged on Tuesday as banks showed reluctance to invest in securities ahead of the upcoming Eid festival.

According to auction results, the cut-off yield—effectively the interest rate—rose to 11.50 percent from 10.47 percent previously. The government raised Tk 40 billion through the bond issuance to help bridge its budget deficit.

Currently, five types of government bonds, with maturities of two, five, 10, 15, and 20 years, are traded in the market. In addition, four types of treasury bills (T-bills), with maturities of 14, 91, 182, and 364 days, are auctioned to manage short-term government borrowing.

The increase in bond yields suggests a shift in banks’ investment priorities, with liquidity management taking precedence ahead of the Eid festival.