Cenbank cuts repo lending to banks to once a week from November
From 1 July, banks were allowed to borrow through repo lending from the central bank two days a week
Starting from 1 November, banks will be able to borrow through repo lending from the Bangladesh Bank only on Tuesday of every week.
The central bank made the announcement in a circular today (21 October).
Moreover, banks will be able to take overnight repo on the day of the Reserve Maintenance Period (RMP) for the convenience of maintaining the Cash Reserve Ratio (CRR) of the banks, it said.
Earlier, from the first day — 1 July — of the current fiscal year of 2024-25, the central bank ceased its daily repo lending to banks to strengthen the country's currency market and improve currency management.
Instead, banks were allowed to borrow through repo lending from the central bank on Monday and Wednesday — two days a week.
Banks use repurchase agreements (repo) for short-term borrowing from the central bank. The open-market operations involve the central bank buying and selling government securities to regulate money supply and credit conditions.
In cases where these days coincide with a holiday, repo lending will be conducted on the subsequent working day, said the circular issued today.
However, the Standing Lending Facility and the Standing Deposit Facility will continue at prevailing rates daily, it added.