Dhaka, Bangladesh (BBN)– The central bank of Bangladesh pumped over BDT 216 billion in the last week using monetary tools to keep the money market stable before the Eid-ul-Azha vacation.
Liquidity pressure on Bangladesh money market remained almost stable in the last week that ended on Thursday ahead of the Eid despite injected liquidity amounting to BDT 216.03 billion in the market by the central bank.
“We’ve injected the fresh fund into the market using different monetary instruments aiming to keep the market stable before the Eid holidays,” a senior official of the Bangladesh Bank (BB) told the BBN in Dhaka.
The central bank provided BDT118.18 billion to the banks on Thursday, the last working day before the Eid-ul-Azha vacation, using its assured liquidity support (ALS) and Repo facilities to help manage their funds smoothly.
The central banker expected that inflow of fund would be increased after the Eid vacation.
Meanwhile, the weighted average rate (WAR) on call money rose to 4.61 per cent on Thursday from 4.48 per cent a week ago. It was 4.61 per cent on December 27, 2018.
The rate was 2.77 per cent at the end of June 2018. It was 4.03 per cent on December 27, 2017.
The call money rate has been showing an upward trend since August 01, mainly due to higher withdrawal of cash money from the banks ahead of the Eid.
The WAR was 4.48 per cent on August 01, 2019 from 4.46 per cent a day ago, the BB data showed.
The volume of overall transactions in the market fell significantly to BDT 33.64 billion on Thursday from BDT 86.53 billion a week before.
Besides, a few number of banks received term deposits from other banks, both private and public, offering higher rates to meet their growing demand for liquidity before the Eid, according to the market insiders.
They also said the ongoing liquidity pressure on the money market may continue in the coming weeks as weak monetary transmission mechanism in Bangladesh.