Dhaka, Bangladesh (BBN)-The central bank of Bangladesh has taken precautionary measures aiming to keep the country’s both money and foreign exchange (FX) markets stable before the Eid-ul-Azha festival.   

As part of the measures, the Bangladesh Bank (BB) will participate actively in the money market from Monday, officials said.

"We're planning to accelerate purchase of the US dollars from the banks for injecting fresh funds in the market before the Eid," a senior official of the Bangladesh Bank (BB) told BBN in Dhaka, adding that the demand for the local currency may pick up from next week ahead of the festival.

"We may strengthen the use of our monetary instruments including special repurchase agreement (repo) auction to keep the money market stable," another BB official explained.

He said the BB has continued buying the US currency from the banks to protect the interests of exporters and migrant workers by keeping the exchange rate of the Bangladesh Taka (BDT) against the greenback stable.

A total of $1.13 billion was bought from the commercial banks between July 1 and October 3 last of the current fiscal (FY) 2013-14 as part of the BB's intervention in the market.

However, the country's foreign exchange reserve stood at $16.38 billion on Thursday following the US dollar purchase.

On the other hand, the inter-bank call money rate may rise slightly from Sunday because of increasing cash withdrawal pressure on the market ahead of the Eid and Durga Puja festivals, senior treasury officials said.

The call money remained stable ranging between 7.00 percent and 8.25 percent since the third week of August last after the Eid-ul-Fitr festival. This indicated stable demand for liquidity in the market, they added.

The call money rate ranged between 5.80 percent and 8.28 percent Thursday against the previous range between 5.80 percent and 8.25 percent. However, most of the deals were settled between 6.50 per cent and 7.00 per cent, according to the market operators.

BBN/SSR/AD-05Oct13-10:28 am (BST)