Bangladesh Bank Circular: Repo Lending Available Only on Monday and Wednesday

Bangladesh Bank has decided to discontinue repo lending to banks every day of the week. Commercial banks can borrow from the Bangladesh Bank by repo on Monday and Wednesday, according to the Debt Management Department (DMD) Circular-09, effective July 1, 2024.

In addition, this circular stated that the Standing Deposit Facility (SDF) and Standing Lending Facility (SLF) will continue daily at the prevailing interest rate.

Here is the detailed following:

Repo lending, a repurchase agreement, states that commercial banks borrow from Bangladesh Bank by selling securities. Earlier, it took place every day, but from now on, it will be twice a week.

A Standing Deposit Facility (SDF) means commercial banks can deposit money in Bangladesh Bank at the prevailing interest rate of 7.00%.

A Standing Lending Facility (SLF) is when commercial banks borrow money from Bangladesh banks for the short term or overnight at the prevailing interest rate of 10.50%.

Bangladesh Bank has adopted this initiative by considering the present economic situation and helping the monetary policy.