57

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Yields on treasury securities remained same in Feb’18
Treasury security issuance was very slow during February 2018. 

There was no T-bond auction and only a handful of 07-days, 14-days 

and 30-days T-bills were issued.
The government borrowing from the banking system has been low 

since FY15 as the government has been borrowing more and more 

from non-bank sources, especially the National Savings Deposit 

Certificates. Throughout 2017, T-bill and T-bond issuance remained 

slow. During March, April, May, August and November of 2017, 

there were no T-bond auctions. Treasury security issuance was 

slightly more vibrant in Dec’17 and Jan’18, with rates moving in an 

upwards direction. As of Jan’18, 2 years and 5 years T-bonds carry 

5.68% and 6.91% rates respectively while 10 years, 15 years and 20 

years BB-bill yield rates were 7.39%, 8.24% and 8.54% respectively.
Interest rate spread continued to fall
Interest rate spread (IRS) of both PCBs and the industry started 

decreasing in Jun’16 and since then, it has been decreasing 

continuously with only a couple of months exceptions. Interest rate 

spread of all banks stood at 4.44% as of Jan’18, down by 4 bps MoM 

basis and 31bps in YoY basis.  IRS of private commercial banks 

(PCBs) stood at 4.27% on Dec’17, a 3 bps MoM decrease and 51bps 

YoY decrease. Lending rates for the banking industry increased by 

7 bps MoM in Jan’18 and stood at 9.42% while the deposit rates 

increased by 10 bps and stood at 5.01%. The IRS of the banking 

industry is expected to squeeze over the coming months as a few 

regulatory measures have pushed banks to strive for better liquidity, 

which is being achieved through deposit sourcing and consequently, 

deposit rates are increasing. 
Weighted average call money rate was 4.11% in Feb’18, a major 

21bps MoM increase. This is the first time since Nov’15 call money 

rates have passed above 4%. 
Exports
During FY17, total exports of the country stood at USD 34.82 

bn, receiving only 1.64% growth YoY. Feb’18 recorded monthly 

export growth of 12.69% YoY and amounted to USD 3.07 bn. 

Export earnings have bounced back driven by surge in shipments 

of garments. FY18 has seen first eight months’ export amounted to 

USD 24.38 bn, an increase of 7.38% YOY. The government has set 

BDT 37.5bn as strategic target for the FY18 exports, a 8.2% increase 

from FY17 numbers. The export performance looks on track for 

annual target to be met, particularly based on encouraging export 

figures in the last couple of months. The Jul’17-Feb’ 18 export figure 

is directly in line with the export target for the period (-0.02% lower).
Imports

Private Sector Credit 

Source: Bangladesh Bank

18.36%

0%

5%

10%

15%

20%

25%

 (20)

 30

 80

 130

 180

 230

 280

Jan-16

Ma

r-

16

Ma

y-

16

Jul-

16

Sep-16

No

v-16

Jan-17

Ma

r-

17

Ma

y-

17

Jul-

17

Sep-17

No

v-17

Jan-18

Change per Month (BDT bn)

Private Credit Growth (YoY)

MoM Change in Private Credit (BDT bn) 

Source: Bangladesh Bank

-20

30

80

130

180

230

280

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2014

2015

2016

2017

2018

Treasury Yields (YoY Comparison)

Source: Bangladesh Bank

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

30 day91 day182 day364 day

2 yr

5 yr

10 yr

15 yr

20 yr

Jan-18

Feb-18

Yields on 91-days bill and 10-years bond

Source: Bangladesh Bank

0%

2%

4%

6%

8%

10%

12%

Oct-

14

Feb-

15

Jun-15

Oct-

15

Feb-

16

Jun-16

Oct-

16

Feb-

17

Jun-17

Oct-

17

Feb-

18

91 Days Bill

10 Years Bond

Change in Yields (for all maturities)

Source: Bangladesh Bank

0%

0.32%

-0.18%

0.10%

0.21%

0.27%

0.23%

0.22%0.23%

0%

0.02%

0.07%

-0.10%

0.17%

0.09%

0.22%0.31%

0.29%

0%

30 days91 days182 days364 days2 years

5 years10 years15 years20 years

Dec-17

Jan-18

Feb-18