Dhaka, Bangladesh (BBN) – Excess liquidity in the country’s banking system grew more than 10 per cent in June, boosted by the government’s new injection of funds into the system as part of speeding up the budget implementation.
The excess liquidity with the commercial banks rose to BDT 344.98 in June this year from BDT 307.65 billion in May 2010, according to the central bank statistics. 
“The government has started releasing funds for implementation of annual development programs that has actually pushed up liquidity in the country’s banking system,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka.
The BB official also said the excess liquidity could fall in July and August ahead of the Eid-ul-Fitr festival. 
The excess liquidity of the state-owned banks stood at BDT 152.68 billion as on June 30, 2010, while that of the private commercial banks was at BDT 141.06 billion. The excess liquidity of the foreign banks was BDT 45.16 billion at the same time.
Total liquid assets of commercial banks stood at BDT 871.96 billion in June this year against BDT 826.65 billion of May of 2010, the BB data showed. 
“Scheduled banks holding of liquid assets as of June, 2010 in the form of cash and balances with Sonali Bank, balances with Bangladesh Bank and unencumbered approved securities are 5.79 per cent, 31.93 per cent and 62.28 per cent respectively of total liquid assets,” the central bank said in a report on liquidity position. 
Most of the banks have invested their excess liquidity in different treasury bills and bonds to minimize the cost of funds, the BB officials added. 
BBN/SI/AD-16Aug10-10:13 am (BST)