T-bill liquidation restriction goes

In a bid to develop secondary market for treasury bills auction, the central bank has withdrawn restriction on liquidating the bills before maturity period.

The restriction was withdrawn through a Bangladesh Bank circular on Sunday which termed the move to be an interim development to pave the way for a secondary market for treasury bill auction.

The advice was given to commercial banks and financial institutions through the circular.

The circular advised financial institutions to properly utilise the facility to better liquidity management, apart from Repo (repurchase agreement) and reverse Repo with the central bank.

Currently, there are six different types of treasury bills which are sold through auctions. These are of 28-day maturity, 91-day maturity and 365-day maturity.

Pubali Bank Managing Director Khondker Ibrahim Khaled said the new method will be beneficial for the bank's cash money.

National Credit and Commerce Bank Managing Director said the system will reduce the instability of the interest rate which is frequently seen in the call money market.

This will also contribute to reducing interest rate, he said.