Dhaka, Bangladesh (BBN)– Operating profit of the Bangladesh Bank (BB) dropped by 25.63 per cent in the last fiscal mainly for higher interest expenses for mopping up excess liquidity from the money market.
The BB’s operating profit came down to BDT 7.72 billion in the fiscal year (FY) 2015-16 from BDT 10.38 billion a year before, according to the central bank statistics.
The figure was BDT 20.38 billion in the FY 14.
The central bank expenses on account of interest payments swelled into BDT 8.01 billion in the FY 16 from BDT 1.20 billion of previous fiscal, officials said.
“The central bank has to pay more as interest expenses to lenders for mopping up excess liquidity in the FY 16 using our monetary instruments like Reverse Repo and BB bill auctions,” a BB senior official told BBN in Dhaka.
He also said the central bank used monetary tools in line with its monetary policy statement to ensure money-market stability.
Currently, three BB bills are being transacted through auctions to adjust the overall excess liquidity in the country’s banking system. The BB bills have 07-day, 14-day and 30-day maturity periods.