Dhaka, Bangladesh (BBN) - The repurchase agreement (REPO) auction of Bangladesh Bank for commercial banks and financial institutions was held on Wednesday, officials said.
Fourteen bids of 1-day and 7-day tenor amounting total of BDT 77.46 billion were received as special REPO. Of those, all bids of 1-day tenor amounting total of BDT 41.70 billion were accepted, according to the auction result.
Moreover, 13 primary dealers (PDs) of 1-day tenor amounting total of BDT 51.2348 billion were provided as liquidity support facility.
The rate of interest of liquidity support facility was 7.25 percent but for the special REPO the rate of interest was 10.25 percent, the Bangladesh Bank (BB), the country’s central bank, said.
The BB earlier selected 15 PDs -- 12 banks and three non-banking financial institutions (NBFIs) -- to handle government-approved securities in the secondary market.
The PDs will subscribe and underwrite primary issues and make secondary trading deals with two-way price quotations.
A PD will not short-sell any particular issue and will not hold a short position in secondary dealings. The PDs will not act as inter-bank or inter-dealer brokers, which has been specified in the guideline.
BBN/SSR/AD-22Dec11-9:22 am (BST)