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The inter-bank call money rate remained almost stable on Thursday, the last working day before the Eid-ul-Fitr festival, as banks managed their funds efficiently with the help of the central bank.
The weighted average rate (WAR) of call money rose to 10.01 per cent on the day from 9.85 per cent of the previous working day. It was 10.01 per cent a week before.
The call money rate ranged from 9.75 per cent to 11.00 per cent on the day against the previous range between 8.80 per cent and 11.00 per cent.
Most of the deals were settled at rates varying between 10.00 per cent and 10.50 per cent, according to market operators.
However, total turnover in the inter-bank call money market rose to Tk 33.12 billion on Thursday from Tk 21.34 billion of the previous working day. It was Tk 46.96 billion a week ago.
Such short-term borrowing normally increases before festivals as demand for cash rises.
"We've been able to manage our funds properly ahead of the Eid festival with the help of the Bangladesh Bank (BB)," the head of treasury at a leading private commercial bank (PCB) told The Financial Express (FE) in response to a query.
Adequate liquidity support from the central bank has helped manage funds smoothly before the Eid festival, the treasury official explained.
Earlier on March 04 this year, the central bank relaxed its cash reserve requirement (CRR) rules aiming to ease liquidity pressure on the market. "Relaxation of CRR rules has helped keep the money market stable before the Eid festival," a BB senior official said, adding that the banks may use around Tk 80 billion in additional funds on a daily basis following such relaxation.
Under the revised rules, the banks are now allowed to maintain the reserve at minimum 3.0 per cent instead of 3.5 per cent earlier on a daily basis, but the bi-weekly average will remain unchanged at 4.0 per cent in the end.
"We've also provided around Tk 300 billion as liquidity support to troubled banks, which has also helped keep the call money market stable before the Eid festival," the central banker noted.
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