FE Report
The inter-bank call money rate is unlikely to rise ahead of the Eid-ul-Fitr festival as the commercial banks are now flooded with large amount of excess liquidity, market operators said.
The call money rate is expected to move up slightly this week because of heavy withdrawal of cash from the banking system for Eid shopping and other expenses.
"We do not think the call money rate will rise ahead of the Eid-ul-Fitr festival because of availability sufficient liquidity in the inter-bank money market," a senior treasury official of a bank told the FE Saturday.
Businessmen and political leaders used to draw large amount of cash from banks before Eid festival for charity in their localities, but such withdrawal is unlikely to be made this year due to the prevailing situation, he added.
The call rate was mainly quoted between 6.50 per cent and 6.60 per cent in recent months due to increase in the flow of fund in the market.
Excess liquidity with all scheduled banks stood at Tk 142.84 billion by the end July last against Tk 142.79 billion at the end of June 2007, according to the central bank statistics.
Before the last Eid-ul-Fitr festival, the call rate ranged between 6.50 per cent and 10 per cent against 6.40 per cent and 10 per cent of the previous level while most of the deals were settled between 6.50 per cent and 6.75 per cent.
Call rate unlikely to rise ahead of Eid
FE Team | Published: October 07, 2007 00:00:00 | Updated: February 01, 2018 00:00:00
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