Express (August 30, 2011)
The inter-bank call money rate was stable Monday despite the pressure of withdrawal of cash from banks, ahead of the Eid-ul Fitr festival, treasury officials said.
The call rate ranged between 18.00 per cent and 20.00 per cent on the last working day before the Eid against the previous day's range between 15.00 per cent and 20.00 per cent.
However, most deals were settled at 20.00 per cent, market operators said.
"The call money rate was stable on the day following injection of fresh funds into the market by the central bank," a senior treasury official of a commercial bank told the FE.
He also said the inter-bank borrowings normally increase before the Eid festival to meet the increased demand of the clients of the banks for withdrawal of cash.
In 2010, the call money rate ranged between 4.0 per cent and 7.00 per cent on the last working day before the Eid-ul-Fitr festival, the treasury official added.
Most branches of the banks, especially at Motijheel, Dilkusha and other commercial hubs of the capital, witnessed long queues of people to withdraw money on the day.
The central bank continued to provide liquidity support to the commercial banks to meet higher demand for cash during the holy Ramadan and Eid-ul-Fitr.
As part of the move, the Bangladesh Bank (BB) injected fresh funds worth Tk 78.46 billion at 6.75 per cent Monday through auction of repurchase agreement (repo) and special liquidity support to the primary dealers (PDs).
The central bank earlier selected 15 PDs -- 12 banks and three non-banking financial institutions (NBFIs) -- to deal in government securities in the secondary market.
Besides, the central bank provided Tk 11.20 billion as special repo facility to the banks with the rate of interest ranging between 8.75 per cent and 8.80 per cent.
Last Thursday, the BB injected funds worth Tk 83.43 billion using the same mechanisms, the central bank officials said.
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