The call money rate was almost flat this week. The rate ranged between 6.00-8.00 per cent throughout the week.
In the Treasury bill auction held Sunday, bid for BDT 5,589.00 million was accepted, compared with total of BDT 12,350.00 million in the previous week's bid. Bid for only 28-D t-bill was accepted and the weighted average yield was unchanged.
Demand for US Dollar remained steady in the market throughout the week.
The dollar rallied to a 16-month high against the yen and a three-month peak versus the Euro Monday boosted by expectations of more US interest rate hikes and a disappointing survey of corporate sentiment in Japan. With investors focused more inflation than growth, the dollar also surged to a two-month high against the Swiss franc and sterling. The Bank of Japan's quarterly tankan survey of business confidence was plus 19 for September, up a tad from the June survey but slightly below financial markets' expectations for a reading of plus 20.
The dollar slipped from this week's 3-month high versus the Euro in the middle of the week as fresh hawkish comments from Federal Reserve officials failed to add more momentum to the greenback's recent rally.
Commercial Bank of Ceylon
Bangladesh Bank has revised the CRR and SLR requirement of Commercial Banks to 5 per cent and 13 per cent. The inter-bank call money market got a boost in the beginning of Ramadan in this week. The rate hovered within the range of 7.00 per cent and 9.25 per cent. This week Bangladesh Bank has injected BDT 4.74 billion to the money market by accepting less Treasury Bills than maturity. Money market dealers are expecting the rate to gain ground in the coming week.
Last week, BDT 10.33 billion worth of T-bill was accepted by the Bangladesh Bank, while maturity of previously accepted T-bills was BDT 5.5890 billion. This time, Bangladesh Bank accepted only 28-days T-bills. Yield of 28-Day T-bill was at 6.75 per cent. On average, the yield of T-bills in this week was similar compared to that of previous week.
Bangladesh Bank recently pro-actively introduced a new type of T-bill/bond outright buy or sell and/or repo-reverse repo transaction settlement system in the market called DvP (Delivery versus payment) Settlement system. This settlement system will effectively evade delivery risk in T-Bill/Bond transaction of any kind (i.e. Out-rite or Repo-Reverse-Repo). This will also help to flow BDT liquidity from big banks to small banks in the market. It is widely expected that a full-fledged Repo/Reverse-Repo market will soon develop in this country and depict a short-term BDT yield curve.
This week the US Dollar retained its steady ground against Bangladesh Taka. In the foreign exchange market, nationalized commercial banks (NCB) were the key sellers and the foreign and private commercial banks were mostly buyers. Demand for foreign currencies was reasonably stable due to large export proceeds and comparatively steady import payments.
CITI Bank NA
The call money rates remained stable at around 7.0 per cent after the increase in CRR and SLR came into effect. Despite the increase in SLR and CRR ratios, the call money rate remained unchanged from previous week's closing level as banks refrained from reinvestment in Bangladesh Bank's Reverse Repo auction.
The call rates traded within 6.50 per cent and 9.0 per cent throughout the week.
Global foreign exchange market, the dollar posted solid gains against the Yen Friday's technical driven trading helped by better-than-expected manufacturing report in Chicago area. The dollar scaled near 16 months peak against the Yen Monday and three months high against the Euro after US manufacturing survey bolstered expectations for further US interest rate hikes.
DSE General Index - traded within a narrow range on Dhaka Stock Exchange (DSE) went through flat session this week as well. The DSE general index traded in a tight range as the closing value stayed between 1,650 and 1,690 throughout the week.