Tk 500 notes won't be demonetised: BB chief
FE Report | Monday, 23 June 2008
The governor of the Bangladesh Bank (BB), Salehuddin Ahmed, stated Sunday categorically that there was no liquidity crisis in the country's banks.
He also ruled out any possibility of demonetising currency notes of Tk 500 (five hundred).
"Both deposits and credits grew at a level higher in the current fiscal than that of the previous one," the BB governor told reporters replying to a query. The money circulation is also at a satisfactory level, he added.
The BB governor, however, declined to give figures in details saying he would take a further look at them before making them public not later than July 10 next.
Asked about the allegation of hoarding of Tk 500 currency notes, the BB governor said the currency notes in circulation remain at a satisfactory level as a proportion to deposits.
"The statistics available with the central bank do in no indicate any hoarding of Taka 500-denominated currency notes", he added.
He also said the central bank expects to issue currency note of Tk 1,000 denomination by October this year.
The comments of the BB governor came after the President of Federation of the Bangladesh Chambers of Commerce and Industry (FBCCI), Annisul Haq alleged Saturday that there were severe liquidity problems in the country's banking sector, leading to their inability to fund new investment projects.
During a discussion meeting with the members of the Economic Reporters' Forum (ERF), the country's apex trade body chief stressed Saturday the need for carrying out a study on whether or not such a crisis was the result of any large-scale hoarding of currency notes of Tk 500 denomination.
The country's private sector credit grew by 23.11 per cent during July-April period of the current fiscal year over that of the same period
of the previous fiscal, the central bank governor noted Sunday.
He also indicated that some commercial banks might have specific problems, reflecting their asset-liability mismatch. This may be because of their overcommitments about lending, exceeding their respective liquidity positions, he added.
"We will take all possible measures so that credit flows to the private sector do not suffer any setback," Mr. Ahmed said.
The central bank will release monetary policy statement before July 10 next, giving an overall projection about credit, money supply and other key indicators for the forthcoming fiscal, he stated.
Meanwhile, a senior official of the central bank told the FE Sunday night that there was no possibility of demonetising Tk 500-denominated currency notes. "There is no reason for any fear or panic", he categorically assured all concerned.
He also ruled out any possibility of demonetising currency notes of Tk 500 (five hundred).
"Both deposits and credits grew at a level higher in the current fiscal than that of the previous one," the BB governor told reporters replying to a query. The money circulation is also at a satisfactory level, he added.
The BB governor, however, declined to give figures in details saying he would take a further look at them before making them public not later than July 10 next.
Asked about the allegation of hoarding of Tk 500 currency notes, the BB governor said the currency notes in circulation remain at a satisfactory level as a proportion to deposits.
"The statistics available with the central bank do in no indicate any hoarding of Taka 500-denominated currency notes", he added.
He also said the central bank expects to issue currency note of Tk 1,000 denomination by October this year.
The comments of the BB governor came after the President of Federation of the Bangladesh Chambers of Commerce and Industry (FBCCI), Annisul Haq alleged Saturday that there were severe liquidity problems in the country's banking sector, leading to their inability to fund new investment projects.
During a discussion meeting with the members of the Economic Reporters' Forum (ERF), the country's apex trade body chief stressed Saturday the need for carrying out a study on whether or not such a crisis was the result of any large-scale hoarding of currency notes of Tk 500 denomination.
The country's private sector credit grew by 23.11 per cent during July-April period of the current fiscal year over that of the same period
of the previous fiscal, the central bank governor noted Sunday.
He also indicated that some commercial banks might have specific problems, reflecting their asset-liability mismatch. This may be because of their overcommitments about lending, exceeding their respective liquidity positions, he added.
"We will take all possible measures so that credit flows to the private sector do not suffer any setback," Mr. Ahmed said.
The central bank will release monetary policy statement before July 10 next, giving an overall projection about credit, money supply and other key indicators for the forthcoming fiscal, he stated.
Meanwhile, a senior official of the central bank told the FE Sunday night that there was no possibility of demonetising Tk 500-denominated currency notes. "There is no reason for any fear or panic", he categorically assured all concerned.