Dhaka, Bangladesh (BBN) - The inter-bank call money rate hit 11.25 percent on Monday as withdrawal of cash from the banks increased ahead of the Eid-ul-Fitr festival, officials said.
The call rate ranged between 6.50 percent and 11.25 percent on the day against the previous range between 6.50 per cent and 11.00 per cent.
However, most of the deals were settled at rates varying between 10.50 percent and 10.75 percent, the market operators said.
"The call money moved up slightly on the day despite the central bank's injection of fresh funds into the market to keep it stable," a senior treasury official of a leading private commercial bank told the BBN in Dhaka.
The treasury official also said the short-term borrowings normally increase before the Eid festival to meet the growing demand for cash from the bank clients.
"The pressure for withdrawal of cash from the banks may increase in the coming days, ahead of the Eid-ul-Fitr festival," he said without elaborating.
The central bank has been providing liquidity support to the commercial banks using different monetary instruments to ease the pressure on the market during the holy month of Ramadan and Eid-ul-Fitr.
As part of the move, the Bangladesh Bank (BB) injected fresh funds worth BDT 142.08 billion on the day through auction of repurchase agreement (repo) and special liquidity support to the primary dealers (PDs) and non-PD banks.
Besides, the central bank has provided fresh fund through purchasing the US dollar from the commercial banks directly to keep the exchange rate of the Bangladesh Taka (BDT) against the US dollar.
"We've injected around BDT 73.28 billion since last week of June in the market through purchasing US$897million from the banks," a BB official said, adding that the central bank may continue such intervention in line with the market requirement.
BBN/SSR/AD-07Aug12-1:16 am (BST)
