Dhaka, Bangladesh (BBN) – The inter-bank call money rate hit 23 percent on Thursday following substantial withdrawal of cash from the banks ahead of the Eid-ul-Azha festival, officials said.

“The call money rate moved up slightly on the day despite the central bank’s injection of fresh fund into the market to keep it stable,” a senior treasury official of a private commercial bank (PCB) told BBN in Dhaka.

The call rate ranged between 10.00 percent and 23.00 percent on Thursday, the last working day before the Eid festival, against the previous range between 10.00 percent and 21.00 percent.

However, most of the deals were settled at 21.00 percent, the market operators said.

The private banker also said such short-term borrowings normally increase before the Eid festival to meet the growing demand of the banks’ clients.

Most of the banks across the city witnessed long queues of people on Thursday, waiting mostly to withdraw money before the Eid festival.

“It’s a seasonal effect on the market. The situation will ease after the Eid vacation,” a senior official of the Bangladesh Bank (BB) said, adding that the central bank is closely monitoring the overall money market.

He also said the BB continued to provide liquidity support to the banks to ease the cash money demand in the market ahead of the Eid.

As part of the move, the BB injected BDT 58.30 billion fresh fund on the day through auction of repurchase agreement (repo), special repo and liquidity support to the primary dealers (PDs).

On Wednesday, the central bank pumped BDT 93.67 billion fund using the same mechanisms.

The BB earlier selected 15 PDs – 12 banks and three non-banking financial institutions (NBFIs) – to deal with government securities in the secondary market.

BBN/SSR/AD-04Nov11-12:41 am (BST)