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Seven-day BB bills’ yield below 1.0pc

FE Report | April 26, 2018 12:00:00

The weighted average yield on seven-day Bangladesh Bank Bills fell to below 1.0 per cent while no bids for 14-Day BB bills were received on Wednesday.

The yield on seven-Day BB Bills came down to 0.85 per cent on the day from 1.32 per cent of the previous day, according to Bangladesh Bank officials.

Ten bids amounting to Tk 37.95 billion were offered for seven-Day BB bills auction on Wednesday. Of which, two bids amounting to Tk 10 billion were received.

On the other hand, 11 bids amounting to Tk 29.21 billion were offered for 14-Day BB bills auction on the same day. But no bid was accepted.

"It's a temporary measure," a BB senior official said about why no bids for 14-Day BB bills were accepted Wednesday.

The central banker also said the BB was still discouraging the banks to invest their excess funds in the bills.

Besides, the central bank has unofficially suspended the auction of 30-Day BB Bills since April 01 to help mitigate the liquidity crunch in the banking system.

"We're bound to deposit our excess fund with the BB's current account without any returns," a senior treasury official at a leading private commercial bank (PCB) told the FE while explaining the latest situation on the money market.

He also said that the banks have been able to use Tk 101 billion additional fund since April 15 after the implementation of revised cash reserve requirement (CRR) rules.

Under the revised rules, the banks are now maintaining 5.50 per cent instead of 6.50 per cent earlier CRR with the central bank from their total demand and time liabilities on a bi-weekly basis.

On the other hand, the weighted average inter-bank call money rate came down to 3.70 per cent on Tuesday from 3.76 per cent of the previous working day.

The amount of overall transactions also fell to Tk 45.93 billion from Tk 46.66 billion.

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