Total turnover on call-money market crosses Tk 70b-mark

Total turnover on the call-money market crossed Tk 70 billion-mark Thursday, the last working day before the Eid-ul-Azha festival, while the rate was almost stable, officials said.
The total turnover on the call-money market increased by more than 8.0 per cent to Tk 72.07 billion on the day from Tk 66.63 billion on Wednesday, according to the central bank's latest statistics.
On the other hand, the inter-bank call rate ranged between 3.00 per cent and 4.50 per cent on the day against the previous range between 2.00 per cent and 4.50 per cent.
However, most of the deals were settled at rates varying between 4.00 per cent and 4.50 per cent, according to the market operators.
"Fund is available now. So the call money rate remained stable despite higher withdrawal of cash from the banks ahead of the Eid festival," a senior official of the Bangladesh Bank (BB) told the FE.
He also said such a situation may continue in the near future.
Talking to the FE, a senior treasury official of a leading private commercial bank said the call money rate remained stable before the Eid because of having excess liquidity with most of commercial banks and the central bank managed the market prudently.
He also said such short-term borrowings normally increase before Eid to meet the growing demand for money from the banks.
Meanwhile, the overall excess liquidity with the commercial banks hit an all-time-high at Tk 1.30 trillion recently due to lower credit growth, particularly in the private sector.
The overall excess liquidity with all the banks stood at around Tk 1.30 trillion on July 14 last from Tk 1.20 trillion as on June 30, the BB data showed.
On the other hand, the central bank purchased US$100 million more from six commercial banks Thursday to help keep the forex market stable ahead of the Eid.
On Wednesday, the central bank similarly purchased $75 million from seven banks on the same ground.
"We've intensified purchase of the US dollar from the banks to protect the interests of exporters and migrant workers by keeping the exchange rate of local currency against the greenback stable ahead of the Eid," another BB official explained.
He said such purchase of the US dollar also helps the banks to comply with the net open position (NOP) rules for holding foreign exchange properly.
"We may continue purchasing the greenback from the banks in line with the market requirement," the central banker hinted.
A total of nearly $1.27 billion were bought from the commercial banks between July 11 and September 08 of the current fiscal year (FY), 2016-17, for offsetting the impact of its increased supply to the market.
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