Dhaka, Bangladesh (BBN) - The inter-bank call money rate crossed 11% on Monday amid higher cash withdrawals ahead of Eid-ul-Azha.
The rate ranged between 9.95% and 11.25% on the day, up from 9.95% to 11.05% previously, while most deals were settled between 10.50% and 11.00%, according to market operators.
The weighted average rate (WAR) also rose to 10.63% from 10.19% in the previous working day and 10.03% a week earlier.
Total turnover in the call money market increased to BDT 47.33 billion from BDT 42.84 billion, though still below BDT 52.99 billion a week ago, reflecting fluctuating liquidity conditions ahead of the festival.
A senior Bangladesh Bank (BB) official said the central bank is closely monitoring the market to ensure stability.
He added that call money rates are expected to ease as liquidity improves through the repo facility and fund injections linked to the central bank’s dollar purchases from banks.
The central bank bought an additional US$100 million through auction from six banks under the multiple price auction method at a cut-off rate of BDT 122.75 per dollar, aimed at stabilising the exchange rate. Since July 13, the central bank has purchased a total of US$5.98 billion from banks under the prevailing floating exchange rate regime.
Echoing the central bank view, a senior treasury official at a leading private commercial bank said higher cash withdrawals ahead of Eid, along with BDT 90 billion in payments against treasury bills issued on Sunday, have intensified pressure on the money market.
He also predicted that the call money rate may fall below 11% today (Tuesday) from the current level.
BBN/SSR/AD