Dhaka, Bangladesh (BBN) - Weighted average call money rates remained well below double digits for most of the year due mainly to the excess liquidity and central bank’s continuous support through repurchase agreement (REPO) and reverse REPO window.
Deals settled between 4.0 percent and 7.0 percent range during the first three quarters of the year.
However, increased seasonal demand ahead of Eid festivals during August and November led call money rates to hover around double digit levels.
Higher government borrowing from the banking sector also created significant pressure in the money market during the last quarter of the year and the market remained very tight during the latter half of December, a Citibank N.A Annual Market Update said.
The US-based Citi, also said the Bangladesh Bank (BB), the country’s central bank, provided REPO and reverse REPO facilities in a very limited scale during this time which contributed to the tightness in the inter-bank money market.
Most of the deals settled between 16 percent and 20 percent range during end part of December, 2011.
BBN/SSR/AD-30Dec11-4:00 pm(BST)