Call money rate still higher
Tuesday, 23 November 2010
FE Report
The call money market continued to be bullish Monday, second working day after the Eid-ul-Azha festival, despite the injection of fresh fund into the market by the central bank.
The inter-bank call rate ranged between 15 per cent and 28 per cent on the day against 6.50-28.00 per cent of the previous working day. However, most of the deals were settled at rates varying between 18 per cent and 20 per cent, the market operators said.
Bangladesh Bank (BB) has continued providing liquidity support to the banks and non-banking financial institutions (NBFIs) to ease the cash money demand in the market.
Under the operation, the central bank injected fresh funds worth Tk 57.3116 billion at 5.50 per cent Monday through auction of repurchase agreement (repo) and special liquidity support to the primary dealers (PDs).
The central bank of Bangladesh earlier selected 15 PDs - 12 banks and three NBFIs - to handle government securities in the secondary market.
On Sunday, the BB injected funds worth Tk 55.8490 billion using same mechanisms, the central bank officials confirmed.
"The call money rate may ease shortly after increase in flow of liquidity in the banking system," a senior treasury official of a commercial bank said, adding that the flow of liquidity may increase gradually due to refund of the cash, which were withdrawn before the Eid festival, in the banking system.
On the other hand, the US dollar remained almost unchanged against the local currency in the inter-bank foreign exchange market due mainly to a low demand for the greenback.
The US dollar was quoted at Tk 70.3000-Tk 70.3500 in the inter-bank foreign exchange market Monday against Tk 70.3500 of the previous working day, the BB data showed.
The call money market continued to be bullish Monday, second working day after the Eid-ul-Azha festival, despite the injection of fresh fund into the market by the central bank.
The inter-bank call rate ranged between 15 per cent and 28 per cent on the day against 6.50-28.00 per cent of the previous working day. However, most of the deals were settled at rates varying between 18 per cent and 20 per cent, the market operators said.
Bangladesh Bank (BB) has continued providing liquidity support to the banks and non-banking financial institutions (NBFIs) to ease the cash money demand in the market.
Under the operation, the central bank injected fresh funds worth Tk 57.3116 billion at 5.50 per cent Monday through auction of repurchase agreement (repo) and special liquidity support to the primary dealers (PDs).
The central bank of Bangladesh earlier selected 15 PDs - 12 banks and three NBFIs - to handle government securities in the secondary market.
On Sunday, the BB injected funds worth Tk 55.8490 billion using same mechanisms, the central bank officials confirmed.
"The call money rate may ease shortly after increase in flow of liquidity in the banking system," a senior treasury official of a commercial bank said, adding that the flow of liquidity may increase gradually due to refund of the cash, which were withdrawn before the Eid festival, in the banking system.
On the other hand, the US dollar remained almost unchanged against the local currency in the inter-bank foreign exchange market due mainly to a low demand for the greenback.
The US dollar was quoted at Tk 70.3000-Tk 70.3500 in the inter-bank foreign exchange market Monday against Tk 70.3500 of the previous working day, the BB data showed.