Cash held outside the banking system has started to decline after a 10-month surge, decreasing by Tk5,743 crore in October, bringing the total to Tk2.78 lakh crore. Bankers attribute this to the gradual restoration of customer confidence in banks and reduced financial irregularities under the interim government. Central bank data indicates a reduction from Tk2.84 lakh crore in September, following a peak of Tk2.92 lakh crore in July 2024. Economists view excess liquidity as harmful to the economy, hindering monetary exchange and investment. The return of funds to banks reflects a growing trust in the financial system, aided by the central bank’s efforts to address irregularities. Additionally, deposits in reputable banks have risen significantly, as customers prioritize financial health over high interest rates. This shift is expected to improve liquidity and stimulate economic activity.
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