In November 2023, the amount of cash held outside Bangladesh’s banks surged to Tk 2,48,441 crore, up from Tk 2,45,943 crore the previous month. High inflation, reaching 9.49% in November, fueled by global supply chain disruptions and currency devaluation, drove depositors to withdraw funds to counter rising living costs.
The national election on January 7 and diminished trust in the banking sector due to irregularities and scandals also contributed to increased cash withdrawals. This trend, persisting since October 2021, has implications for monetary policy, liquidity management, and economic stability, requiring close monitoring and potential interventions. Excess liquidity in banks dropped to Tk 1.41 lakh crore in November, impacting lending and investment activities. The Bangladesh Bank’s sale of $27.82 billion from foreign exchange reserves aimed to address a severe dollar shortage, further affecting local currency liquidity.
