BB halts 360-day special repo facility

Bangladesh Bank (BB) has scrapped the 360-day special repo facility due to the improvement in the coronavirus situation and a lack of demand for the borrowing tool, reports BSS.

The central bank introduced the special repo on May 13, 2020 in order to implement the stimulus packages and to ensure smooth liquidity management, as per a BB circular issued on Tuesday.

A repurchase agreement, or repo, is a short-term agreement to sell securities in order to buy them back at a slightly higher price.

Under the special repo, banks and financial institutions were able to borrow against additional treasury bills and bonds of statutory deposit rate with the BB.