Dhaka, Bangladesh (BBN)– Bangladesh’s inter-bank call money rate remained almost stable on Wednesday, the last working day before the Eid-ul-Azha festival despite higher withdrawal of cash from the banks, treasury officials said.
The call money rate ranged between 5.40 per cent and 6.50 per cent on the day against the previous range between 5.30 per cent and 6.50 per cent.
However, most of the deals were settled at rates varying between 5.50 per cent and 6.0 per cent, according to the market operators.
“The call money rate remained stable before the Eid because most of the banks are having excess liquidity,” a senior treasury official of a foreign commercial bank told BBN in Dhaka.
The official also said the central bank has also managed overall the market prudently using its instruments.
Such short-term borrowings normally increase before Eid to meet the growing demand for money from the banks, the banker added.
However, the Bangladesh Bank (BB), the country’s central bank, has maintained a declining trend of mopping up the excess liquidity from the market through reverse REPO (repurchase agreement) auction recently to keep the call money rate stable ahead of the Eid.
The central bank of Bangladesh Bank withdrew BDT 57.07 billion at 5.25 per cent from the market through reserve REPO auction on Wednesday. It was BDT 64.21 billion on the previous day.
“The BB has used its monetary instruments efficiently to keep both money and inter-bank foreign exchange market stable ahead of the Eid,” a senior central banker explained.
The call money rate hit 9.50 per cent on October 2 last year, the last working day before the Eid-ul-Azha festival. The call rate ranged between 6.00 per cent and 9.50 per cent on the day against the previous range between 6.00 per cent and 9.25 per cent.