Call money rate soars on demand from non-banks
The inter-bank call money rate jumped to 9 percent yesterday -- the highest in the last one year -- as most of the non-bank financial institutions rushed to borrow to meet their overnight demand.
A total of Tk 7,497 crore was transacted in the call money market yesterday, down by more than Tk 404 crore from the previous day, Bangladesh Bank data showed.
The call money rate, at which banks lend and borrow from each other, reached as high as 8.5 percent on Monday.
“The non-banks' demand for money pushed the rate slightly up yesterday,” said a treasury official of a private bank.
Twenty-two non-banks participated in the overnight money market, of which 20 were borrowers. Only Idcol and IPDC were lenders.
Among banks, The City borrowed the highest amount -- Tk 800 crore, and among non-banks, state-owned Investment Corporation of Bangladesh borrowed the highest at Tk 710 crore.
State banks -- Agrani, Janata, Rupali and Sonali -- were the major lenders offering Tk 3,687 crore in total.
The call money market has remained sluggish in the past several months and the rate hovered between 6 and 7 percent. Bankers blamed the slowdown on their surplus funds.
The call money rate generally soars during festivals like Eid, but it has been stable for the last two years.
Bankers said the rate has increased now due to demands from tanners and leather businesses. Also, a huge amount will flow out of banks to meet payments for wages and festival bonuses.
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