Dhaka, Bangladesh (BBN)- Liquidity crunch hasn't hit the market but a few banks are facing liquidity shortage for their "own inefficiency,” a senior central banker said.
"The banking sector is awash with excess liquidity, instead. There's is no liquidity problem in the market," a senior official of the Bangladesh Bank (BB) said.
He also said a few number of banks couldn't manage their fund properly as they didn't devise any liquidity contingency plans. “We're keeping a close eye to the market," he added.
He also estimated that commercial banks were swimming in around Tk 240 billion in excess liquidity.
The BB official said the Bangladesh Bank (BB) has continued to provide cash support to banks through repurchase agreement (Repo) auction to keep the money market stable.
The central bank has issued warning to 12 commercial banks after the inter-bank call money rate shot up by a record 190 per cent on December 19, indicating that some commercial banks were facing a big mismatch in their fund position.
The inter-bank call money rate - the interest rate at which banks lend to each other for short period -- eased slightly further Thursday after the central bank's intervention, treasury officials said.
The call rate ranged between 14 per cent and 15 percent Thursday against 12-15 percent of the previous working day, market operators said, adding that tight liquidity persisted in the market.
On the other hand, the central bank has continued its overdraft (OD) facilities to the commercial banks aiming to keep foreign exchange market stable.
Under the move, the BB provided OD facilities for US$92 million Thursday to help two commercial banks clear its import bills.
"We’ve provided the SCB such facilities to settle import payment bills for petroleum products, food grains and equipments for power plants," another BB official said, adding that such facility will continue in line with the market requirement.
BBN/SI/AD-06Jan11-8:27 pm (BST)
