Govt faces Tk2.84 lakh crore G-Sec maturity pressure in FY27 as borrowing rises

Infographic/TBS

The government faces a substantial debt repayment burden in FY27, with government securities worth Tk2,83,779 crore scheduled to mature, according to the latest Quarterly Bulletin of Bangladesh Government Securities published by Bangladesh Bank's Debt Management Department.

Of the total, Treasury bills (T-bills) account for Tk1,94,326 crore, and Treasury bonds (T-bonds) Tk71,961 crore. Sukuk maturities stand at Tk15,500 crore, while Special Purpose Treasury Bonds (SPTBs) worth Tk1,993 crore are also due for repayment.

The maturity pressure is significantly higher than in the following fiscal year and could increase the government's refinancing needs as it rolls over maturing securities while managing its overall borrowing requirements.

Govt borrowing rises Tk60,224cr in Apr-Jun

The government's net borrowing through government securities rose by Tk60,224 crore in the fourth quarter of FY25-26, taking the outstanding stock to Tk8,99,980 crore at the end of June from Tk8,39,756 crore in March.

During April-June, the government raised Tk39,000 crore through T-bonds, Tk1,14,162 crore through T-bills and Tk17,000 crore through three Sukuk.

Investor demand for government securities also strengthened sharply. The average bid coverage ratio in primary auctions rose to 2.83 from 1.48 in the previous quarter and 2.46 in the same quarter of FY25.

This means investors submitted bids equivalent to Tk2.83 for every Tk1 offered by the government, indicating stronger demand for government securities.

T-bonds remain dominant

T-bonds accounted for the largest share of outstanding government securities at the end of June at Tk6,01,033 crore, followed by T-bills at Tk1,94,326 crore, Sukuk at Tk53,500 crore and SPTBs at Tk51,121 crore.

Net T-bond issuance fell 14% year-on-year to Tk23,984 crore from Tk27,795 crore in the corresponding quarter of FY25, while net T-bill issuance declined 26% to Tk19,241 crore from Tk25,895 crore.

However, net issuance of 91-day T-bills more than doubled to Tk11,717 crore during the quarter.

Sukuk issuance rises

The government issued three Sukuk worth Tk17,000 crore during the quarter, compared with Tk2,000 crore in the same quarter of FY25.

The issuances comprised two socio-economic development Sukuk worth Tk5,900 crore and Tk5,600 crore, and the country's first short-term Bangladesh Government Investment Sukuk worth Tk5,500 crore, with a 273-day tenor.

The short-term instrument was introduced to provide institutional and individual investors with a Shariah-compliant money market instrument.

Banks dominate ownership

Primary dealer banks held 50.38% of outstanding T-bills and T-bonds at the end of June, followed by non-primary dealer banks with 23.68% and Bangladesh Bank with 8.47%.

Foreign investors held just 0.06% of outstanding T-bills and T-bonds, highlighting their limited participation in the domestic government securities market.

The secondary market was similarly concentrated, with the top 10 traders accounting for 72.53% of total transactions during the quarter. United Commercial Bank led with 16.91%, followed by Eastern Bank at 9.40% and BRAC Bank at 8.79%.

Yields remain below last year's levels

Despite some increases in bond yields during the quarter, average yields remained below FY25 levels.

The 91-day T-bill yield fell to 9.99% from 11.73%, while the 364-day yield declined to 10.34% from 11.89%.

The 10-year T-bond yield fell to 10.71% from 12.24%, while the 20-year yield declined to 10.89% from 12.40%.

Bangladesh Bank also introduced the transaction-based Bangladesh Overnight Financing Rate (BOFR) and Dhaka Overnight Money Market Rate (DOMMR), revised its Open Market Operations guidelines, and appointed BRAC Bank and Pubali Bank as new primary dealers.

The central bank said these developments indicate continued progress towards a deeper, more transparent and resilient government securities market, supporting public debt management and monetary policy implementation.