After five full days of bank closure on Wednesday banks borrowed more than Tk25,521 crore from Bangladesh Bank under repo, assured repo, assured liquidity support (ALS) and Islami Bank liquidity facility (IBLF).
Bankers said that lack of money in ATM booths and slow internet, as well as the mounting pressure of unpaid utility bill payments increased the demand for cash on opening day (July 24).
As a result, they faced a severe liquidity crisis. This aggravated an already-persistent liquidity crisis that has been brewing for the past two years.
Bangladesh Bank said that the auction of Bangladesh Bank repo, assured repo and assured liquidity support (ALS) for the commercial banks and financial institutions and Islamic Banks Liquidity Facility (IBLF) for Shariah-based banks was held on Wednesday.
Through those a total amount of Tk25,521.40 crore was provided.
Out of this, Shariah-based banks took about Tk1,481 crore, while the remaining money was taken by other banks and financial institutions.
The central bank also informed that in the auction, 14 banks and two financial institutions submitted 68 bids amounting to Tk5,007.29 crore for 7-day tenure repo facility, 9 banks submitted 17 bids amounting to Tk2,370.39 crore for 14-day tenure repo facility, 12 banks and 2 financial institutions submitted 75 bids amounting to Tk7,197.16 crore for 28-day tenure repo facility, 3 banks submitted 3 bids amounting to Tk5,691.34 crore for 180-day tenure assured repo facility, 11 primary dealer (PD) banks submitted 35 bids amounting to Tk3,774.22 crore for 1-day tenure assured liquidity support facility.
With those, one bank submitted a bid amounting to TK497 crore for 14-day tenure Islamic Banks liquidity facility, five banks submitted five bids amounting to Tk984 crore for 28-day tenure Islamic Banks liquidity facility.
However, all of these bids were accepted by the Bangladesh Bank auction committee.
Data shows that the interest rates of the above-mentioned 7, 14 and 28-day tenure repo, assured repo and assured liquidity support were 8.60%, 8.70%, 8.75%, 8.50% and 8.50% per annum, respectively and the expected profit rate (EPR) for 14 days tenure IBLF was 5.50% and the range of the Expected Profit Rate (EPR) for 28 days tenure IBLF was 3.25-6.50%.
