BB to withdraw excess liquidity from market

The central bank has decided to withdraw excess liquidity from the market to maintain stability in the currency market.

In a circular issued on Thursday, the central bank’s Debt Management Department said money will be withdrawn through auction of the Bangladesh Bank bill from August 9.

The circular was sent to the chief executives of all banks and financial institutions in the country.

It also said the Bangladesh Bank will hold a 7-day, 14-day and 30-day auction this month. The 7-day and 14-day auction will be held on August 9, 16 and 25. Meanwhile, the 30-day auction of the central bank will be held on August 11, 23 and 31.

According to Bangladesh Bank, there is a surplus liquidity of Tk 2,31,000 crore in the banking sector till June. The sector’s liquidity started to accumulate as demands for loans remained low despite various initiatives to revive the economy from the adverse effects of the coronavirus pandemic.