Dhaka, Bangladesh (BBN)- The inter-bank call money rate hit more than 12 per cent on Monday indicating that a fresh demand for funds was created in the money market, treasury officials said.
The fresh demand for liquidity has been created despite injection of a large amount of fund by the central bank recently to keep both the country’s money and foreign exchange markets stable.
The call rate ranged between 10 per cent and 12.50 percent on the day against 6.50-11.50 per cent on the previous working day. However, most deals were settled at rates varying between 10 percent and 11 percent, market operators said.
“The call money rate increased slightly as precautionary measure has been taken by some commercial banks to avoid any unwanted situation ahead of the Eid-ul-Fitr festival,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka.
He also said the banks have sold their excess US dollars to the central bank for using the local currency fund in the money market.
“The inflow of foreign exchange has increased recently following steady growth of inward remittance and decreasing import payments,” the central banker said.
He also said the BB bought the US dollars from the banks at market rate on the day aiming to keep the exchange rate of the Bangladesh Taka (BDT) against the greenback stable.
“The call money rate may ease today (Tuesday) following purchase of $104 million by BB from the banks,” a senior official of a leading private private commercial bank told BBN.
The BB injected fresh funds of BDT 146.08 billion on the day through auction of special REPO and special liquidity support to the primary dealers (PDs).
The central bank earlier selected 15 PDs -- 12 banks and three non-banking financial institutions (NBFIs) -- to deal with government securities in the secondary market.
The rate of interest of special REPO was 10.75 per cent but for the liquidity support facility the rate of interest was 7.75 per cent, according to the auction result.
BBN/SSR/AD-17July12-7:50 am (BST)
