Dhaka, April 23 -- Yields on 10-year government bonds rose sharply on Tuesday, reflecting subdued demand from banks that are increasingly favouring shorter-term instruments to manage liquidity and risk.

The shift comes amid higher government borrowing in the final quarter of the fiscal year, putting upward pressure on long-term interest rates and signalling tighter conditions in the debt market.

The cut-off yield, generally known as the interest rate, on Bangladesh Government Treasury Bonds (BGTBs) climbed to 10.98 per cent on the day from 10.26 per cent earlier, according to auction results.

"Most banks prefer to invest their excess liquidity in shorter-tenure government securities rather than long-term bonds," a senior treasury offic...