According to a Bangladesh bank official, cenbank has started repo lending twice a week instead of every day. It will take place only on Monday and Wednesday.
The Standing Lending Facility and
Standing Deposit facility will continue daily at the prevailing rate.
This move is directed at helping
contractionary monetary policy reduce the money supply in the market. In
addition, it will increase the cost of borrowing from the central bank if
commercial banks face a liquidity crisis.
Previously, commercial banks could apply for
repo lending every day at 8.50% by selling securities from the Bangladesh bank.
From now on, banks can get money support from the central bank if they fall
into a liquidity crisis through the Standing Lending Facility, whose rate is
10.00%, which raises the cost of funds.
To relieve themselves from this
liquidity crisis, banks are focusing on the liability business, hoping to make
a profit by collecting funds at a lower price.
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