Dhaka, Bangladesh (BBN) - Eid spending turned into heavy withdrawal from banks which created a cash crunch in the country’s banking system, forcing the central bank to inject fresh fund into the market in the last couple of days.
The Bangladesh Bank (BB) has injected more than BDT 50.46 billion liquidity into the banking system since July 23 to keep the money market stable ahead the Eid festival.
“We had expedited our liquidity support to the banks gradually considering the overall market requirement,” a BB senior official told BBN in Dhaka on Sunday.
He also said the central bank had injected the fund using different monetary instruments including assured liquidity support to keep the money market stable.
The BB’s liquidity support to the banks rose to BDT 30.85 billion on July 27 from BDT 17.76 billion of the previous working day. It was BDT 1.84 billion on July 23 last.
The call money rate was stable until Sunday, the last working day before the Eid-ul-Fitr festival, following liquidity was managed jointly by both the BB and the banks properly to avoid any volatility in the market.
BBN/SSR/AD-29July14-1:32 pm (BST)