Call rate is still at 20pc despite fresh fund injection

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FE Report
The inter-bank call money rate was at 20 per cent Sunday, the second working day after the Eid vacation, despite injection of fresh fund by the central bank.
The call rate ranged between 8.50 per cent and 20 per cent on the day, unchanged from the previous working day. However, most of the deals were settled between 9.00 and 13 per cent, the treasury officials of the commercial banks confirmed.
"We expect that the call money rate would ease soon, following increased flow of liquidity in the market," a senior official of a commercial bank told the FE.
He also said the call rate maintained an upward trend on the day because of increased demand for liquidity in the market after the three-day Eid vacation and deadline of maintaining cash reserve requirements (CRR) with the Bangladesh Bank (BB).
The market still remained under pressure as some commercial banks faced liquidity crunch, as they struggled to maintain their CRR with the central bank by December 14 in line with the existing rules.
Under the existing the rules, a five per cent CRR can be maintained on a bi-weekly average basis. But the banks in some cases can reduce the reserve to four per cent, but the bi-weekly average has to be five per cent at the end.
A good number of commercial banks took the advantage of the existing rules, as they kept four per cent CRR instead of five cent with the central bank before the Eid festival.
The central bank injected fresh fund amounting to Tk 34.16 billion through repurchase agreement (repo) auction at 8.75 per cent to keep the inter-bank money market stable on the day.
On the other hand, the BB withdrew fund amounting to Tk 3.05 billion at 6.75 per cent from the market on the same day through the reverse repo auction, the central bank officials confirmed.