Money Market - Bangladesh Business News

Call Money Rate Rises Ahead of Eid

BBN Desk — Wed, 06 Jul 2022 15:00:45 +0000

Dhaka, Bangladesh (BBN) - The inter-bank call money rate increased on Wednesday ahead of the Eid-ul-Azha following higher withdrawal of cash from the banks.

The weighted average rate (WAR) on call money rose to 5.48 per cent on the day from 4.88 per cent of the previous working day, according to the central bank’s latest statistics. It was also 4.57 per cent on Monday.

The volume of transactions in the inter-bank call money market came down to BDT 86.87 billion on the day from BDT 95.24 billion of the previous working day, the official data showed.

The call money rate ranged between 4.25 per cent and 6.00 per cent on the day against 4.00-6.00 per cent on Tuesday.

Most of the deals were settled at rates varying between 4.50 per cent and 5.50 per cent, according to market operators.

“The ongoing upward trend of call money rate may continue tomorrow (Thursday), the last working day before the Eid vacation,” a senior treasury official told the BBN.

Such a short-term borrowing normally increases before festivals, as demand for cash grows.

He also said pressure on cash withdrawal from the banks is easing gradually as the use of credit and debit cards, referred to as plastic money, is increasing in Bangladesh.

“A good number of people are now connected with mobile financial services (MFS), agent banking and e-banking that reduces the tendency of holding cash money to their wallets,” the private banker explained.

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Money market: BDT demand falls after slashing CRR

BBN Desk — Wed, 25 Apr 2018 02:57:36 +0000

Dhaka, Bangladesh (BBN) - The demand for Bangladesh Taka (BDT) in the country’s money market fell recently as slashing the cash reserve requirement (CRR) by the central bank of Bangladesh.

After improving supply of fresh funds, the weighted average inter-bank call money rate and weighted average yield on Bangladesh Bank (BB) Bills dropped significantly in the recent days, according to market operators.

All 57 scheduled banks of Bangladesh are enabled to use BDT 101 billion additional fund since April 15 after implementation of revised CRR rules.

Under the revised rules, the banks will have to maintain 5.50 per cent instead of 6.50 per cent CRR with the central bank from their total demand and time liabilities on a bi-weekly basis.

However, the weighted average inter-bank call money rate came down to 3.76 per cent on Monday from 4.53 per cent as on April 12 while volume of overall transactions also fell to BDT 46.66 billion from BDT 78.36 billion, according to the central bank’s statistics.

On the other hand, the weighted average yield (WAY) on 07-Day BB Bills fell to 1.32 per cent on Tuesday from 2.98 per cent as on April 12 while the WAY on 14-Day BB Bills dropped to 1.28 per cent from 2.98 per cent, the BB data showed.

Besides, the central bank unofficially suspended the auction of 30-Day BB Bills since April 01 to help mitigate the liquidity crunch in the banking system.

The market operators, however, said the central bank is not accepting all bids of the BB Bills in the recent days.
On Tuesday, 12 bids amounting total of BDT 36.55 billion were offered for 07-Day BB bill auction. Of which three bids amounting a total of BDT 6.55 billion were accepted.

On the other hand, 10 bids amounting total of BDT 35.95 billion were offered for 14-Day BB bill auction. Of which four bids amounting BDT 24.50 billion were accepted.

Talking to the BBN, a BB senior official said the central bank expects that the banks will invest their excess funds in the productive sectors to help achieving maximum economic growth by the end of this fiscal year.
“Our latest moves will also help bring down the interest rates on lending at single digit from the existing level,” the BB official explained. “It also creates scope for cash hungry banks to receive fund with lower interest rates from the banks having excess liquidity.”

Earlier on April 16, the BB asked the banks to take effective measures to lower the interest rate on lending to single digit from the existing level as soon as possible.

The BB’s latest move came three days after the prime minister’s advice to the banks to bring down the lending rates to single digit to boost investments in the country.

“Interest rates have to be slashed and this should be in single digit. Or else, the investment will not accelerate along with the employment generation,” said Prime Minister Sheikh Hasina while receiving donations for her Relief and Welfare Fund from the Bangladesh Association of Banks (BAB) at her official residence Ganobhaban in the capital on April 13.

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Call money rate likely to keep stable before Eid

BBN Desk — Tue, 28 Jun 2016 19:23:47 +0000

Dhaka, Bangladesh (BBN)- The inter-bank call money rate is likely to keep stable before the Eid-ul-Fitr, as most of the banks are awash with excess liquidity following lower effective demand particularly for large loan.
The call money rate came fell to 1.10-4.50 per cent on Tuesday from 2.75-4.50 per cent of the previous working day. However, most of the deals were settled at rates varying between 3.25-4.0 per cent, the market operators said.
According to the central bank satieties, total turnover in the call money market also dropped to BDT 56.72 billion on the day from BDT 59.28 billion of the previous working day. It was BDT 59.98 billion on Sunday.
“Falling trend in the overall transactions indicates lower demand for overnight borrowing in the money market despite higher withdrawal of cash from the banks ahead of the Eid,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka.
Considering the current liquidity situation in the market it is unlikely that the call money rate would increase from the existing level ahead of the Eid festival, according to the central banker.
Normally, the call money rates increase before the Eid festival to meet the growing demand for cash from the banks’ clients.
The overall excess liquidity with the commercial banks stood at around BDT 1.16 trillion as of May 26. Major portion of the funds has been invested in the risk-free government securities, the BB official added.
He also said excess reserve, generally known as excess over daily minimum cash reserve requirement (CRR) with the central bank, stood at around Tk 33 billion.
Meanwhile, the overall excess liquidity with the commercial banks has started showing a falling trend recently due to higher credit growth, particularly in the private sector, the central banker explained.
The excess liquidity came down to BDT 1.16 trillion as of May 26 from BDT 1.17 trillion in the first week of the same month, the BB data showed.
“We expect that the declining trend of excess liquidity with the banks may continue in the coming months, if the existing private sector credit flow persists,” the BB official noted.
Senior bankers, however, said most of banks are investing their excess funds in the BB bills and other government-approved securities to minimise cost of funds.
“We’re also offering lower interest rates on lending to ‘good customers’, particularly the corporate entities, to minimise our cost of funds,” a senior official of a leading private commercial bank told BBN in Dhaa.
He also said most of the credits are going to SMEs, agriculture, apparel and clothing sector, consumer and commercial purposes.
“Demand for large loans is still low despite the recent higher private sector credit growth,” the banker observed.

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Indian Rupee gains 6 paise against US dollar in early trade

BBN Desk — Thu, 09 Jun 2016 05:12:10 +0000

Mumbai, India (BBN)-Indian rupee advanced by 6 paise to trade at a fresh four-week high of 66.59 against the US dollar in early trade on Thursday on sustained selling of the American currency by banks and exporters.
Moreover, weakness in dollar against other currencies overseas on expectations that the US Federal Reserve will keep benchmark interest rates low for longer also supported the rupee at the Interbank Foreign Exchange market, dealers said, reports the PTI.
They said, however, a lower opening in the domestic equity market, capped the rupee’s gain.
On Wednesday , the rupee firmed up by 12 paise to close at a four—week high of 66.65 on sustained selling of the American currency by banks and exporters amid persistent foreign capital inflows.
Meanwhile, the benchmark BSE Sensex fell by 90.74 points or 0.33 per cent at 26,929.92 in early trade today.
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Indian Rupee opens 3 paise higher against US dollar at 66.74

BBN Desk — Wed, 08 Jun 2016 04:44:00 +0000

Mumbai, India (BBN)-Indian rupee appreciated by 3 paise to 66.74 against the dollar in early trade on Friday on increased selling of the US currency by exporters and banks amid higher foreign inflows.
Forex dealers said a weakening dollar against some currencies overseas and a higher opening in domestic equities kept the rupee rising, reports the PTI.
On Tuesday, the rupee had gained 20 paise to close at a fresh three-week high of 66.77 on sustained selling of the American unit amid strong recovery in domestic equities.
Meanwhile, the benchmark BSE Sensex rose 95.74 points or 0.35 per cent to 27,105.41 in early session on Wednesday.
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Indian Rupee up 5 paise against US dollar in early trade

BBN Desk — Wed, 01 Jun 2016 04:40:19 +0000

Mumbai, India (BBN)-Reversing its two-day downward trend, Indian rupee recovered by 5 paise to 67.21 against the US dollar in early trade at the Interbank Foreign Exchange market on selling of the American currency by exporters and banks.
Trading sentiments also got a boost after macro-economic indicators such as GDP numbers and core sector growth showed that the country’s economy has gained momentum, reports the PTI.
India’s GDP grew 7.9 per cent in the January-March quarter of 2015-16, taking the overall economic growth to a five-year high of 7.6 per cent for the entire fiscal, mainly on account of good performance of manufacturing and farm sectors.
Core infrastructure sectors also grew at an over four—year high rate of 8.5 per cent in April, helped by double-digit expansion in refinery products and electricity generation.
Forex dealers said weakness in dollar against some other currencies overseas and a higher opening in the domestic equity market also supported the rupee.
The rupee had lost 10 paise against the US dollar to settle at 67.26 a dollar in yesterday’s trade due to sustained demand for the American currency from banks and importers.
The benchmark BSE Sensex recovered by 62.19 points, or 0.23 per cent, to 26,730.15 in early trade.
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Indian Rupee gains 5 paise against US dollar in early trade

BBN Desk — Tue, 31 May 2016 05:11:29 +0000

Mumbai, India (BBN)-Indian rupee recovered by 5 paise to 67.11 against the US dollar in early trade at the Interbank Foreign Exchange market on fresh selling of the US currency by banks and exporters.
Forex dealers said a higher opening in the domestic equity market and a weakening dollar against other currencies overseas supported the rupee, reports the PTI.
Yesterday, the rupee retreated from its one-week high to close 13 paise lower at 67.16 against the US currency on fresh bouts of dollar demand from importers.
Meanwhile, the benchmark BSE Sensex rose by 111.60 points, or 0.41 per cent, to 26,837.20 in early trade on Tuesday.
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Indian Rupee opens 25 paise lower against US dollar at 67.28

BBN Desk — Mon, 30 May 2016 05:24:24 +0000

Mumbai, India (BBN)-Indian rupee weakened 25 paise to 67.28 against the US dollar in early trade following month-end demand for the American currency from importers and banks.
Forex dealers said the US dollar’s gain against other currencies overseas also gave the rupee the sinking feeling, reports the PTI.
However, a higher opening of the domestic equity market capped the losses.
The rupee had appreciated 14 paise against the American currency to end at a one-week high of 67.03 on Friday on the back of robust dollar inflows in equities.
Meanwhile, the benchmark BSE Sensex rose further by 116.82 points, or 0.43 per cent, to 26,770.42 in early trade.
BBN/SK/AD

Indian Rupee gains 4 paise against US dollar to 67.29

BBN Desk — Thu, 26 May 2016 05:21:06 +0000

Mumbai, India (BBN)-Indian rupee firmed up by 4 paise to 67.29 against the US dollar in early trade on Thursday on increased selling of the US currency by exporters and banks amid a higher opening in the domestic equity market.
Forex dealers said weakness in the dollar against other currencies overseas supported the rupee, reports the PTI.
Further, a higher opening in the domestic equity market gave the uptrend some momentum, they added.
On Wednesday, the domestic unit rebounded from its 2—1/2 month low with an impressive 42-paise gain to close at 67.33 — its sharpest single-day jump in over two months.
Meanwhile, the benchmark BSE Sensex rose 187.44 points, or 0.72 per cent, to 26,068.61, in early session on Thursday.
BBN/SK/AD

Indian Rupee snaps 9-day losing run, recoups 20 paise vs USD

BBN Desk — Wed, 25 May 2016 05:23:22 +0000

Mumbai, India (BBN)-Reversing its nine-day losing trend, Indian rupee Wednesday recovered 20 paise to 67.55 against the US dollar in early trade on fresh selling of the American currency by exporters and banks amid a higher opening in the domestic stock markets.
Forex dealers said weakness in the dollar against other currencies overseas also supported the rupee, reports the PTI.
Yesterday, the rupee had lost 26 paise, or 0.39 per cent, to end at a fresh 2-1/2 month low of 67.75 on sustained demand for the American currency.
Meanwhile, the benchmark BSE Sensex surged by 304.86 points, or 1.20 per cent, at 25,610.33 in early session on Wednesday.
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