Dhaka, Bangladesh (BBN) - The inter-bank call money rate hit 40 percent on Sunday following squeezing liquidity support by the central bank of Bangladesh, officials said.
The call rate ranged between 7.0 percent and 40 percent on the day against 16-32 per cent of the previous working day. However, most of the deals were settled at rates varying between 28 per cent and 33 per cent, the treasury officials added.
"The call money rate has increased slightly on the day mainly due to slash liquidity support through repurchase agreement (Repo) auction by the central bank particularly for primary dealer (PD) banks and financial institutions," a senior treasury official of a commercial bank said.
The Bangladesh Bank (BB) earlier selected 15 PDs - 12 banks and three NBFIs - to handle government securities in the secondary market.
On Sunday, the Bangladesh Bank (BB) received 15 bids of one- day tenor amounting to total of BDT 33.3931billion. But the central bank provided Tk 7.0182 billion against the bids, according to the central bank auction result.
The treasury official also said the upward trend of call money may continue Monday as the government borrowed worth Tk 4.76 billion on Sunday through issuing treasury bills.
“The fund will be deposited to the government accounts with the BB on Monday,” he added.
Besides, some banks are taking preparation to meet the new cash reserve requirement (CRR), which will come into effect from December15 this year, he noted.
On December 1 this year, the central bank raised the by 0.5 percentage points to 6.0 per cent for the commercial banks to curb inflationary pressure on the economy.
BBN/SI/AD-13Dec10-12:42 am (BST)