Dhaka, Bangladesh (BBN) - The inter-bank call money rate shot up 22 percent at the maximum on Wednesday, indicating emergence of a fresh 'temporary' liquidity pressure in the money market, treasury officials said.
The call rate ranged between 8.75 per cent and 22 per cent on the day against 7.75-12 per cent on the previous working day. However, most deals were settled at rates varying between 20 per cent and 22 per cent, they added.
The liquidity pressure followed the restrictive policy move by the Bangladesh Bank (BB), the country’s central bank, about providing the required amount of support to the commercial banks, particularly primary dealers (PDs).
“The central bank has suspended the repurchase agreement (Repo) auction temporarily aiming to contain inflationary pressures on the economy. But it has also provided liquidity support to the banks through special Repo to meet their emergency demand for cash money,” a central banker said.
Besides, a total of BDT 32.00 billion, which was collected as license renewal fees from the mobile phone operators, were deposited by some commercial banks with the government's accounts through the central bank on the day.
“The BB has also restricted liquidity support facility to the PDs and this has furthermore caused the liquidity pressure in the market,” a senior member of the Primary Dealers Bangladesh Limited (PDBL) told BBN.
He also said they sought BDT 58.00 billion as liquidity support from the central bank to meet our requirements for cash money on the day. But the central bank has provided BDT 49.22 billion against our demand for BDT 58.00 billion, he added.
The PDBL member also said at least four PDs banks have failed to comply with the cash reserve requirement (CRR) rule of the central bank because of their liquidity shortfall.
The central bank earlier selected 15 PDs -- 12 commercial banks and three non-banking financial institutions (NBFIs) -- to deal with government securities in the secondary market.
BBN/SSR/AD-08Dec11-11:00 am (BST)