Liquidity crisis on the wane: BB

Liquidity crisis is on the decline, the Bangladesh Bank (BB) has said, reports bdnews24.com. The central bank, in an email sent to media houses Monday, said the there was no liquidity crunch in the country. The BB explained that it was aimed at countering some negative reports on the issue, recently published in various national newspapers. It also assured the banks to provide the required amount of foreign currency needed to meet import costs. The email pointed out that recently, the reserves, maintained by the scheduled banks with the Bangladesh Bank, had improved. At the end of February, the reserves stood at Tk 170 billion. "A decreasing trend has been observed in the repo demand by the banks, which indicates a fall in their liquidity crisis," it read. The central bank also pointed out that it had increased the supply of the US dollar in the market to address the demand hike for the foreign currency, caused by a rapid growth of import demand. "This assistance (forex supply) will continue in the coming months to allow imports of essentials. The banks have already been notified about it," it said. The BB sold $359.5 million to the banks between July 2010 and Mar 9, 2011. Besides, the short-term foreign currency loans given by the central bank to other banks stood at $374 million on Mar 8 this year.