Dhaka, Bangladesh (BBN) – The central bank of Bangladesh has extended the timeframe of assured liquidity support (ALS) for the primary dealers (PDs) by 15 days to increase the cash liquidity in the market, officials said.
The PDs are allowed to enjoy liquidity support against both success and devolved securities for a maximum of two and half months at a stretch from the date of issue of the government approved securities instead of two months, according to the new provisions.
“The central bank has extended the liquidity support to the PDs considering the overall market situation,” a senior official of the Bangladesh Bank (BB), the country’s central bank, told BBN in Dhaka.
The BB issued a directive in this connection on Wednesday and asked the chief executives of all PD banks and financial institutions to follow the latest provisions of the ALS.
The PDs welcomed the central bank’s latest move, saying that it would help them to meet the growing demand for cash liquidity to some extent.
“The PDs had earlier requested the central bank to extend such liquidity facility for a maximum of at three months instead of two months,” a senior member of the Primary Dealers Bangladesh Limited (PDBL) said, adding that 12 PD banks are now holding government securities worth around Tk 180 billion in excess of their statutory liquidity ratio (SLR) requirement with the central bank.
The central bank earlier selected 15 PDs – 12 banks and three non-banking financial institutions (NBFIs) – to deal with the government-approved securities in the secondary market.
BBN/SSR/AD-23Feb12-7:40 am (BST)
