Call money rate goes up to 5.59 per cent

The inter-bank call money rate in Bangladesh rose further on Thursday owing to the growing demand for cash ahead of Eid-ul-Azha.

According to Bangladesh Bank, the rate in the inter-bank call money market, where banks borrow from each other on an overnight basis, hit 5.59 per cent.

It stood at 5.48 per cent on Wednesday, the highest since 2016.

Bangladesh Bank injected a record $7.62 billion into the market in the fiscal year that ended on June 30, meaning an equivalent local currency amount has moved in the other direction, intensifying the liquidity crunch.

The government‍‍`s borrowing from the banking sector had also increased significantly in the last fiscal year, amid weak revenue generation, putting additional pressure on the liquidity position of banks, according to a treasury head of a commercial bank.

The government borrowed Tk 64,755 crore from the banking system in FY2021-22 in contrast to Tk 26,078 crore the year before.