Dhaka, Bangladesh (BBN)– The inter-bank call money rate remained almost stable on Monday, the last working day before the Eid vacation, despite big rush for withdrawal of cash from the banks.

The call money rate ranged from 4.50 per cent to 5.0 per cent on the day against the previous rate between 4.25 per cent and 5.0 per cent, according to the market operators.

However, the weighted average rate (WAR) on call money rose to 4.59 per cent on Thursday from 4.55 per cent of the previous working day, the central bank’s latest statistics showed.

The call money rate ranged from 2.0 per cent to 5.0 per cent on June 14 last calendar year, the last working day before the Eid against the previous rate of between 1.80 per cent and 5.0 per cent.

Most of the deals were settled at rates varying between 2.50 per cent and 4.50 per cent, according to the BBN Data.

Senior bankers, however, said available liquidity helped keep the money market stable despite higher pre-Eid withdrawal of cash from the banks.

The central bank has continued to inject funds into the market through repo auction and assured liquidity support (ALS) to the banks to keep the market stable ahead of Eid.

As part of the move, the BB injected fresh fund amounting to more than BDT 269.24 billion into the market in the form of repo and ALS on Monday in line with the banks’ requirements.

Earlier on Thursday, the central bank also injected BDT 230 billion into the market in the form of repo and ALS on the same grounds.

Few number of banks that have no excess securities after maintaining SLR with the central bank faced difficulty to manage their funds ahead of the Eid.

“We did not collect required fund in the last hours on Monday despite offering higher rates on short-term deposit to other banks,” a senior official of the commercial bank tolled the BBN in Dhaka on Tuesday morning.

Actually, overall turnover in the inter-bank call money market maintained a decreasing trend in the last couple of days as some banks were reluctant to lend their excesses fund to other banks through call money market mainly due to lower interest rates.

The banks prefer to invest their fund in other forms including deposit to other cash-hungry banks instead of call money market, according to market insiders.

The volume of overall transactions in the market came down to BDT 47.14 billion on Thursday from BDT 69.54 billion of the previous day. It was BDT 71.74 billion on May 28.

Normally, such a short-term borrowing normally gets increased before festivals as demand for cash grows.

Most of the bank branches in Motijheel, Dilkusha and other commercial areas of the capital saw people queue up for withdrawing money.

Different initiatives including injection of fund by the central bank into the market have helped keep the market stable ahead of Eid, they added.

As part of the moves, the government had released the 4th installment of cash incentives amounting to BDT 11.19 billion for disbursement among major exporters for the fiscal year (FY) 2018-19.

The fund will be distributed among the exporters for the period of April-June, 2019.

Besides, a significant amount of fund the government released for the implementation of annual development programme has already been disbursed.

The central bank has already devolved a substantial amount of fund by itself, which also helped push up money supply in the market, according to the insiders.

They also said inter-bank repo market was also active ahead of the Eid vacation.

The amount of turnover crossed BDT 20 billion in the inter-bank repo market in the last couple of days to meet growing demand for liquidity ahead of the Eid.

The overall turnover rose to BDT 23.60 billion on Wednesday from BDT 18.93 billion of the previous working day, according to the Bangladesh Bank (BB) data.

The insiders also predicted that the existing trend in the market may continue this month but pressure on the money market may rise in the month of July ahead of Eid-ul-Azha.

On the other hand, pressure on cash withdrawal from the banks is easing gradually as the use of credit and debit cards, referred to as plastic money, is increasing in Bangladesh, according to the bankers.

A good number of people are now connected with mobile financial services, agent banking and e-banking that reduces the tendency of holding cash money to their wallets, they explained.