Mobilising liquidity top priority
Fazle Kabir, Bangladesh Bank governor
From the very beginning, the central bank has given top priority to mobilising adequate liquidity for the financial sector if the pandemic hits Bangladesh's economy and the crisis prolongs. In order to ensure a smooth supply of this liquidity to the various sectors and sub-sectors of the economy, Bangladesh Bank has expanded the size of some refinancing schemes.
The Export Development Fund (EDF) has been increased to $5 billion from $3.5 billion. Interest rate on the fund was slashed to 2 per cent from more than 2.7 per cent.
From April 1, the cash-reserve ratio (CRR) at scheduled banks was brought down on weekly average basis to 5 per cent from 5.5 per cent previously. As a result, banks would get an additional Tk 6,500 crore to lend.
In order to ensure adequate liquidity in the banking sector, the central bank's Repo's repurchase rate was revised downward by 25 basis points to 5.75 per cent from 6 per cent annually. Now, banks will have to spend less in pooling liquidity resources.
Considering the demand of the people during the general holiday, banks have been kept open on a limited scale so that banking services such as cash deposit and withdrawal, pay order and depositing treasury 'chalan' can be carried out. Measures have been put in place for depositing and clearing chalans related to open market sales. In order to ensure the quick encashment of cheques, Bangladesh Automated Clearing House has been kept open.
If outstanding bills on credit cards remain unpaid from March 15, 2020 to May 31, 2020 because of the social distancing, banks have been asked not to charge late payment fees.
The BB has issued guidelines to pay wages and salaries to the workers of the export-oriented sectors for April to June from the Tk 5,000 crore stimulus package unveiled by the prime minister on March 25.
Relevant industries hope that their workers will get their salaries for April on the last day of the month.
Some provisions related to foreign currency transactions have been relaxed in the wake of the coronavirus outbreak.