Written by The Banking Post
Bangladesh’s banking sector saw improved liquidity in August as key indicators pointed to stronger funding conditions and reduced volatility, according to central bank data released on Sunday.
Total call-money transactions reached Tk 1.16 trillion during the month, while repayments stood slightly higher at Tk 1.17 trillion, leaving a surplus of Tk 9.34 billion. Overnight borrowing, the largest component of the call-money market, accounted for nearly 88 per cent of the trades.
The weighted average interest rate on overnight borrowing slipped to 9.98 per cent in August from 10.03 per cent in July. Repo transactions with Bangladesh Bank also eased, with banks borrowing Tk 1.09 trillion and repaying Tk 1.16 trillion — a net return of Tk 63.38 billion.
In treasury operations, Tk 315 billion was issued in 90-day instruments, while maturities stood at Tk 323.98 billion, resulting in a net return of Tk 8.98 billion.
“Liquidity conditions strengthened in August, allowing most banks to settle obligations without difficulty,” said a senior central bank official. The official added that treasury yields began to ease as market risks and volatility declined.
Turnover in the call-money market fell slightly by 0.62 per cent compared to July. Interbank repo transactions dropped 16.5 per cent to Tk 253.24 billion, while central bank repo turnover was down nearly 30 per cent to Tk 1.09 trillion.
