Dhaka, Bangladesh (BBN) – The inter-bank call money rate remained stable on Thursday, the last working day before the Eid-ul-Fitr festival, because of having excess liquidity with most of banks, treasury officials said.

The call rate ranged between 5.25 per cent and 6.50 per cent on the day unchanged from the previous level. However, most of the deals were settled at rates varying between 5.50 per cent and 6.0 per cent, they added.

“Nearly 20 banks are facing excess liquidity burden because suspension of treasury bonds auctions, by the government, in May and June,” a senior treasury official of a leading private commercial bank told BBN in Dhaka.

He also said the central bank is withdrawing the excess liquidity from the market gradually using its reverse REPO (repurchase agreement) auction tool.

The Bangladesh Bank (BB) withdrew BDT 119.94 billion at 5.25 per cent from the market through reverse REPO auction Thursday. It was BDT 125.45 billion Tuesday.

Most of the banks located at Motijheel, Dilkusha and other commercial places of the capital witnessed long queues of people waiting mostly to withdraw money before the Eid festival.

Some banks provided payment services to their clients even after working hours to meet the demands of cash before the Eid vacation.

“We’ve extended our payment service time to meet cash requirements of the clients,” a senior official of a private commercial bank said, adding that cash demand normally rises before the Eid holiday.

The call money rate started falling soon after the postponement of the treasury bonds auction on May 5 last, according to the market operators.

The call money rate came down to 6.25-8.00 per cent on May 5 last from 6.50-8.00 per cent of the previous working day, they added.

Earlier on May 4 last, the government suspended the auction of treasury bonds for the months of May and June last to manage its cash management properly.

BBN/SSR/AD