Dhaka, Bangladesh (BBN)- The inter-bank call money rate hit 25 percent on Monday following mounting pressure on withdrawal of cash from banks ahead of the Eid-ul-Azha festival.

“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 commercial bank told the FE.

The call rate ranged between 10.00 per cent and 25 per cent on Monday, the last working day before the Eid festival, against 6.50-23.00 per cent in the previous working day. However, most of the deals were settled at rates varying between 18 per cent and 20 per cent, the market operators said.

The treasury official also said the short-term borrowings normally increase before the Eid festival to meet the growing demand of the bank clients.

The central bank continues to provide liquidity support to the banks and non-banking financial institutions (NBFIs) to ease the cash money demand in the market ahead of the Eid.

As part of the move, Bangladesh Bank (BB), the country’s central bank, injected fresh funds worth BDT 53.5173 billion at 5.50 percent on Monday through auction of repurchase agreement (repo) and special liquidity support to the primary dealers (PDs).

The central bank of Bangladesh earlier selected 15 PDs – 12 banks and three NBFIs – to handle government securities in the secondary market.

On Sunday, the central bank injected funds worth BDT 48.1344 billion using the same mechanisms, the central bank officials confirmed.

“It’s a seasonal effect on market. The market will ease after the Eid vacation,” a BB senior official told BBN in Dhaka, adding that the central bank is monitoring the overall money market closely.

Most of the banks located at Motijheel, Dilkusha and other commercial places of Dhaka city witnessed long queues of people waiting mostly to withdraw money before the Eid festival.

BBN/SSR/AD-16Nov10-9:52 pm (BST)