Tuesday, December 8, 2015, Agrahayan 24, 1422 BS, Safar 25, 1437 Hijri

Market Update
Surplus liquidity keeps call money rate at low
Observer Analyses
Published :Tuesday, 8 December, 2015,  Time : 12:00 AM  View Count : 17

Interbank call money market was very active on Monday as the demand for call money shot up higher following increased business activities. But the call money rate remained at its low level as most banks are crippled with a huge amount of surplus liquidity, fund managers said.
The overnight money rate touched its high at 6.00 per cent and low at 4.50 per cent when reverse repo stood at 5.25 per cent and 91-day treasury bills at 5.28 per cent, central bank officials said.
The overall excess liquidity with commercial banks now more than Tk 1,31000.00 crore, which kept the call money rate at its lowest level since long. Banks have placed a portion of this liquidity in government approved-securities at low yield- nearly half of their cost of funds. The reasons for this accumulated liquidity have mostly been attributed to contraction in investment activities and subsequent decline in credit due to political unrest, gas and electricity shortage in industrial units and high interest rates.

Editor : Iqbal Sobhan Chowdhury
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