Excess liquidity in banks comes down
Monday, 13 December 2010
Siddique Islam
Excess liquidity in the country's banking sector declined by over 3.50 per cent in October this year as investment demand increased reflecting a higher credit flow in the private sector.
The overall excess liquidity with the commercial banks came down to Tk 288.4944 billion in October 2010 from Tk 299.00 billion in August, according to the central bank statistics.
"The excess liquidity had shown a declining trend in July this year which continued in the month of October also," a senior official of the Bangladesh Bank (BB) told the FE Sunday.
He also said the excess liquidity may also fall in the coming months due to increasing government borrowing for implementation of budgetary development programmes.
"The private sector credit growth may continue in the near future as import cost will be higher with high prices of essentials including fuel oil, edible oil and wheat in the global market," another BB official said.
Credit flow to the private sector recorded a growth of 25.85 per cent to Tk 576.22 billion in August 2010 on a year-on-year basis compared to 24.75 per cent or Tk 543.34 billion over the previous month, according to the central bank statistics.
Besides, capital market investment by some commercial banks and non-banking financial institutions (NBFIs) has contributed to the overall credit flow to the private sector, the BB officials added.
Excess liquidity in the country's banking sector declined by over 3.50 per cent in October this year as investment demand increased reflecting a higher credit flow in the private sector.
The overall excess liquidity with the commercial banks came down to Tk 288.4944 billion in October 2010 from Tk 299.00 billion in August, according to the central bank statistics.
"The excess liquidity had shown a declining trend in July this year which continued in the month of October also," a senior official of the Bangladesh Bank (BB) told the FE Sunday.
He also said the excess liquidity may also fall in the coming months due to increasing government borrowing for implementation of budgetary development programmes.
"The private sector credit growth may continue in the near future as import cost will be higher with high prices of essentials including fuel oil, edible oil and wheat in the global market," another BB official said.
Credit flow to the private sector recorded a growth of 25.85 per cent to Tk 576.22 billion in August 2010 on a year-on-year basis compared to 24.75 per cent or Tk 543.34 billion over the previous month, according to the central bank statistics.
Besides, capital market investment by some commercial banks and non-banking financial institutions (NBFIs) has contributed to the overall credit flow to the private sector, the BB officials added.