Wednesday, June 19, 2024

Section

বাংলা
Dhaka Tribune

The need for cash before Eid raises call money rates

In the last seven days, daily Bangladesh Bank has been providing the banks with around Tk100 billion

Update : 19 Apr 2023, 08:08 PM

The demand for cash withdrawal has surged before Eid raising the call money rate for interbank transactions. 

According to Bangladesh Bank website data, the average call money rate increased from 5.99% to 6.19% between April 2 and April 18. 

Data also shows that the lowest interest rate during this time ranged from 5% to 6%.

The influx of money is also increasing. According to central bank sources, Bangladesh Bank has been supplying banks with an average of Tk80 billion per day for the last month through repo, liquidity support facility, Islami Bank Liquidity Facility (IBLF), and Mudaraba Liquidity Facility (MLS).

In the last seven days, the daily average figure of these instruments is up to around Tk100 billion.

Seeking anonymity, an executive of commercial banks said the central bank is injecting a large amount of cash into banks daily. 

“Regarding liquidity support, the central bank helped a lot more than before. At the same time, people's trust in the banking system keeps improving again. This is actually contributing to improving the liquidity situation in the banks,” official added. 

According to Bangladesh Bank data, the amount of excess liquidity in the banking sector plunged by Tk577.07 billion to Tk1.46 trillion at the end of December 2022 from Tk2.03 trillion in June 2022.

However, the call money rate has started rising sharply since March 21, 2022, when it was 2.05%.

Following the Russia-Ukraine war and the volatility in the forex market, coupled with mass withdrawal of funds from the banks amid rumors of liquidity shortfall - created a demand for the short-term interbank loans and the call money rate hit a record high of 7.0% on January 25, 2023.


Top Brokers

About

Popular Links

x