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Money mkt operation to continue on holidays

Siddique Islam | April 01, 2020 00:00:00

The central bank has decided to keep open the operation of inter-bank call money market and repurchase agreement on a limited scale aiming to minimise possible liquidity risks during the ongoing general holidays.

"We're ready to provide liquidity support to banks using repo facility, if necessary," a senior official of the Bangladesh Bank (BB) told the FE while explaining the main objective of its latest decisions.

Interested banks will have to submit repo bids to the securities department of the central bank's Motijheel office by 12:30 pm after filling in necessary forms as per rules, according to a notification issued by the BB on Tuesday.

On the other hand, the participating banks in the inter-bank call money market will send their transaction statements to the Debt Management Department of BB within 12:30pm, it added.

Senior bankers, however, welcomed the BB's latest decisions, saying that it will help meet inter-bank liquidity requirement which is crucial to banking business.

"Cash-hungry banks will benefit from opening inter-bank call money market and repo facility on a limited scale," a treasury head of a leading private commercial bank (PCB) told the FE.

Most of the banks already received repo facility from the central bank last week, considering their possible liquidity requirements ahead of the general holidays, he explained.

Currently, total outstanding of repo operation stood at around Tk 280 billion, according to a BB official.

He also said the amount covers overnight, 7-day, 14-day and 28-day tenors of repo facility.

The central bank earlier decided to keep open the Bangladesh Automated Clearing House (BACH) along with the operations of Bangladesh Electronic Funds Transfer Network (BEFTN) on a limited scale during the ongoing general holidays.

Talking to the FE, another BB official said both systems are running but the functions of Real-Time Gross Settlement (RTGS) will remain suspended till April 02.

The central bank had already asked all the scheduled banks to provide services on limited scale from March 29 to April 02 by keeping open their branches from 10:00 am to 1:30 pm to help curb the spread of coronavirus in Bangladesh.


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