Dhaka, Bangladesh (BBN)- Bangladesh’s money market was stable on Thursday, the last working day before the Eid-ul-Azha festival, thanks to a higher inflow of remittance as well as lower import payment, officials said.
The inter-bank call money rate ranged between 6.50 percent and 10.00 percent on the day against the previous range between 6.00 percent and 10.00 percent.
However, most of the deals were settled at 10 per cent, the market operators said, adding that the call money rate hit 25 percent on November 3 last year before the Eid festival.
“The central bank has injected extra fund through purchasing the US dollar from the commercial banks directly along with the normal liquidity supports to keep the market stable before the Eid festival,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka.
The call money rate for the non-banking financial institutions (NBFIs) borrowing funds from the commercial banks remained unchanged at maximum 12.00 percent on the day.
The total turnover in the call money market rose to BDT 55.92 billion on the day from BDT 55.34 billion of the previous working day, according to the central bank statistics.
The BB official also said the central bank has bought on an average US$ 50 million to $ 60 million from different commercial banks each working day recently to keep the exchange rate of the Bangladesh Taka (BDT) against the US dollar stable.
As part of the operation, the BB bought $ 45 million from six commercial banks on Thursday at the market rate to keep the inter-bank foreign exchange market stable.
The US dollar was quoted at BDT 81.20-BDT 81.22 in the inter-bank foreign exchange market on the day, unchanged from the previous level, the BB data showed.
"We've expedited intervention in the market recently to protect the interest of exporters and migrant workers through keeping the exchange rate of the local currency against the US dollar stable," another central banker said.
A total of $1.715 billion was bought from the commercial banks, so far, in the current fiscal year (FY 2012-13) as part of the central bank's intervention in the market, according to the BB officials.
“The BB has continued to buy the US dollar from the banks for keeping the market stable through offsetting the rising trend of foreign currency supply recently," a senior official of a leading private commercial bank said.
The private banker also said most of the commercial banks were selling the US dollar to the central bank to meet their extra liquidity pressure before the Eid festival.
“Higher growth of inward remittance, lower import payment pressure, and rising trend of export proceeds realization before the Eid have contributed to the increase in the inflow of foreign exchange in the market,” he noted.
Bangladesh received $ 3.552 billion during the first quarter (Q1) of the FY ’13, marking a 19.47 per cent growth over the same period of the previous fiscal.
Besides, the central bank has been providing the liquidity support to the banks through special repurchase agreement (repo) auction and the liquidity support to the primary dealer (PDs) and non-PD banks to ease the pressure on the market.
As part of the move, the BB injected fresh funds worth BDT 103.58 billion Thursday through auction of repo and in the form of special liquidity support to the PD and non-PD banks.
Earlier on Tuesday, the central bank injected funds worth BDT 106.64 billion using the same mechanisms, the central banker added.
Meanwhile, the country's overall import payments decreased by 2.53 percent to $ 8.139 billion in the Q1 of the FY ’13 from $ 8.351 billion in the corresponding period of the previous fiscal.
On the other hand, import orders also dropped by 10.21 percent to $ 8.667 billion during the period under review from $ 9.653 billion in the same period of the previous fiscal year.
BBN/SSR/AD-25Oct12-11:30 pm (BST)
