Excess liquidity in Bangladesh’s banking sector increased to Tk 1,98,544 crore in October from Tk 1,78,091 crore in September, reflecting a recovery in depositors’ confidence after political instability and banking irregularities. The surge follows a sharp decline in liquidity during July and August, driven by student protests, inflation, and mass withdrawals. Following the government’s fall in August, the Bangladesh Bank’s bailout measures and high deposit rates encouraged depositors to return their funds to banks.
Bank deposits rose to Tk 17.55 lakh crore in October, while cash circulating outside the banking system declined. More than 80% of the surplus liquidity was in the form of securities. The banking sector had faced severe liquidity challenges earlier in 2024 due to high defaulted loans, dollar sales by the central bank, and low deposit growth. The instability of the dollar market also contributed to further strain on liquidity.
Source for more details:
