In March 2024, excess liquidity in the banking system surged by approximately Tk5,000 crore, attributed to a robust deposit growth of nearly 10%. However, cash excess liquidity decreased by Tk2,000 crore as banks invested in government Treasury bills and bonds, offering higher interest rates. This liquidity trend is partly due to increased government borrowing from both state-owned and private commercial banks, totaling over Tk65,000 crore in the fiscal year until April 22. Despite these fluctuations, excess liquidity remains subject to monitoring, with banks mandated to maintain statutory liquidity and cash reserve ratios. Although liquidity stress persists, the central bank is providing short-term loans to alleviate pressure, while banks grapple with high call money rates and preferential investment in Treasury bills and bonds for higher returns.
Source for more details:
