Banks, NBFI to publish DIBOR rate thru BAFEDA
Monday, 1 December 2008
Siddique Islam
Eight primary dealer banks and a non-banking financial institution (NBFI) will publish interbank-offered rates initially through BAFEDA as the Dhaka Interbank-Offered Rate (DIBOR) is going to be introduced.
The decision was taken at a meeting of the executive committee of Bangladesh Foreign Exchange Dealers' Association (BAFEDA), held at its city office Sunday with its Chairman Syed Abu Naser Bukhtear Ahmed in the chair.
Vice Chairman of BAFEDA and Managing Director of Janata Bank Limited SM Aminur Rahman also attended the meeting.
"We've decided to introduce DIBOR shortly to ensure transparency in the interbank money market," the BAFEDA chairman told the FE after the meeting.
Mr Bukhtear, who is also Managing Director and Chief Executive Officer of Agrani Bank Limited, said the BAFEDA would request all member banks to take necessary measures to publish their interbank-offered rates gradually.
Meanwhile, a BAFEDA sub-committee recommended that banks be invited to provide indicative rates for introducing the DIBOR as the benchmark interest rate in the country's financial market.
On September 7 last, the four-member sub-committee was formed to formulate the code of conduct for operating the DIBOR properly, a BAFEDA member said.
The DIBOR is a rate at which the banks will to lend to each other for a specific maturity period in the Dhaka market.
It is also fixed daily for reference purpose. It indicates a key interest rate level used for setting rates on loans and floating rates on notes and for calculating cash settlement of derivative instruments of certain interest rates.
Eight primary dealer banks and a non-banking financial institution (NBFI) will publish interbank-offered rates initially through BAFEDA as the Dhaka Interbank-Offered Rate (DIBOR) is going to be introduced.
The decision was taken at a meeting of the executive committee of Bangladesh Foreign Exchange Dealers' Association (BAFEDA), held at its city office Sunday with its Chairman Syed Abu Naser Bukhtear Ahmed in the chair.
Vice Chairman of BAFEDA and Managing Director of Janata Bank Limited SM Aminur Rahman also attended the meeting.
"We've decided to introduce DIBOR shortly to ensure transparency in the interbank money market," the BAFEDA chairman told the FE after the meeting.
Mr Bukhtear, who is also Managing Director and Chief Executive Officer of Agrani Bank Limited, said the BAFEDA would request all member banks to take necessary measures to publish their interbank-offered rates gradually.
Meanwhile, a BAFEDA sub-committee recommended that banks be invited to provide indicative rates for introducing the DIBOR as the benchmark interest rate in the country's financial market.
On September 7 last, the four-member sub-committee was formed to formulate the code of conduct for operating the DIBOR properly, a BAFEDA member said.
The DIBOR is a rate at which the banks will to lend to each other for a specific maturity period in the Dhaka market.
It is also fixed daily for reference purpose. It indicates a key interest rate level used for setting rates on loans and floating rates on notes and for calculating cash settlement of derivative instruments of certain interest rates.