BB introduces special repo for one year

Bangladesh Bank (BB) has introduced a special repurchase agreement (repo) for one year to help the banks and non-bank financial institutions (NBFIs) in providing loans under the government-declared stimulus packages for coronavirus-hit industries.

Banks and NBFIs can take this fund by submitting their extra securities of statutorily liquidity reserve to the central bank as lien, as per a BB circular issued on Wednesday.

According to BSS, the special repo rate would be decided at the time of auction by the auction committee, the release added.

The instruction will be in effect immediately and will be continued until further notice.

Generally, the Bangladesh Bank supports cash to the banks and NBFIs for regular repo for one to 28 days. Recently, it reduced regular repo’s interest rate to 5.25 per cent twice.