call money rate 175% Video

Dhaka, Dec 15 (bdnews24.com)? Call money rate hit a record high of 175 percent as banks rushed to collect liquid funds.

The banks were meeting the central bank's directive to increase cash reserve ratio that took effect on Wednesday

The highest call rate was 62.5 percent on Tuesday, 40 percent on Monday and 35 percent on Sunday.

The Bangladesh Bank issued an instruction to increase the cash reserve ratio (CRR) by 0.5 percentage point to 6 percent and the overall statutory liquidity ratio to 19 percent with effect from Wednesday.

That means if a bank has Tk 100 deposit, it has to maintain minimum Tk 6 as cash and Tk 13 in the form of bonds with the central bank.

The banks are under pressure to meet the Bangladesh Bank's requirement as the new directive would wipe out about Tk 30 billion cash fund from the market.

Raising import payment, diversion of cash to the stock market and reluctance of the Bangladesh Bank to provide liquidity support are some reasons behind the recent fund crisis.

The Bangladesh Bank on Tuesday lent Tk 11.47 billion to banks and financial institutions for one day.

The central bank on Monday lent Tk 9.77 for one day and on Sunday Tk 7.01 billion for the same period.

The 14 primary dealers also took credit of Tk 37.39 billion for one-day on Monday and Tk 33.71 billion on Sunday for the same period.

The central bank on December 1 had issued circulars on the hike of CRR and SLR to be effective from December 15.

Under the new system, general banks will have to maintain at least 19 percent SLR while Islamic banks 11.5 percent.