Dhaka, Bangladesh (BBN)- The inter-bank call money rate shot up to 50 per cent on Monday due to tightening of liquidity support by the central bank of Bangladesh, treasury officials said.
The call rate ranged between 8.0 per cent and 50 per cent on the day against 7.0-40 per cent of the previous working day. However, most of the deals were settled at rates varying between 34 per cent and 37 per cent.
“The call money rate has increased on the day mainly due to squeezing of liquidity support through repurchase agreement (Repo) auction by the central bank recently,” a senior treasury official of a commercial bank said.
The Bangladesh Bank (BB) received 16 bids of one-day tenure, amounting to BDT 45.9851 billion on Monday. But the central bank provided BDT 9.7719 billion against the bids, according to the BB auction result.
Besides, the government borrowed a total of BDT 4.76 billion on Sunday through issuing treasury bills, which also indirectly influenced the call money rates, the treasury official added.
He also said the upward trend of call money may continue until December 15 for taking preparation to meet the new cash reserve requirement (CRR) by the banks.
On December 1, the central bank raised the CRR to 6.0 per cent for the commercial banks to curb inflationary pressure on the economy.
“Higher call rate may hamper normal banking businesses in near future due to the lack of adequate liquidity in the market,” the treasury official noted.
BBN/SI/AD-13Dec10-11:58 pm (BST)