• Tuesday, May 24, 2022
  • Last Update : 04:24 pm

Call money rate sees marginal rise before Eid

  • Published at 03:21 am July 25th, 2014
Call money rate sees marginal rise before Eid

The interbank call money rate increased slightly to above 7% in last two weeks as demand for cash rose ahead of Eid-ul-Fitr. The rate remained stable within a range between 6.25% and 6.50% during last two months.

The rate was highest 7% and lowest 6% in the call money market yesterday, according to Bangladesh Bank.

The interbank call money rate remained stable at a range between 7% and 7.5% before the Eid-ul-Fitr last year due to huge excess liquidity in the market since last one and half year.

The rate was 7% for bank-to-bank transactions and 8% for non-bank financial institutions until yesterday as compared to a range between 6.25% and 6.50% in last couple of months.

Robust remittance inflow, slowdown in investment and sluggish imports have helped create excess liquidity, keeping the bank-to-bank lending rate stable instead of its seasonal upswing, said a senior official of Bangladesh Bank.

Bangladesh Bank, meanwhile, is injecting funds into the market almost every day through arranging special repo in response to demands from the commercial banks to keep market more liquid ahead of the festival, he said.

“We did not face liquidity crisis as of now and would not face it in the next couple of working days,” said a senior executive of a private bank. “The demand for money this time is, however, much less than the previous occasions.”

According to latest figures, Sonali Bank and The Farmers Bank lent Bank Asia and Pubali Bank at the highest rate of 7% yesterday while Citi Bank N/A lent Southeast Bank at the lowest rate of 6%.

The central bank is providing the commercial and primary dealer banks with around Tk100 crore everyday through special repo.

A senior executive said Bangladesh Bank did not face pressure from banks for money ahead of this festival as the banks are not facing liquidity crisis.

Meanwhile, the Taka appreciated a little last week as a dollar was traded at Tk77.5 as compared to Tk77.6 at the beginning of this month thanks to increased inflow of remittance ahead of Eid.

The country received $936.63m in remittance only in the first three weeks of this month.

The figure was $1.28bn in June, 21% higher than $1.05bn of the same month previous fiscal year.

Bangladesh Bank continued its effort to keep the exchange rate stable ahead of Eid through buying dollar so that expatriates do not become looser, said a senior executive of the central bank.

The inflow of remittance increased in the last several months of the outgoing fiscal year compared to the beginning as the country started returning to normalcy after a prolonged political unrest, he said. 

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