The overnight call money rate showed an increasing trend last week. The call money rate ranged between 10.00-12.00 per cent. It started to increase from the middle of the week and ended the week at 12.50-14.50 per cent.
In the Treasury bill auction held Sunday, bid for Tk 7,643 million was accepted, compared with a total of Tk 8,437 million in the previous week's bid. The weighted average yield increased by 15 BPS for 364 days T-bills.
The demand for US dollar was high in the past week and the US dollar remained bullish against Bangladeshi taka.
On Monday, the Euro rose to a one-month high versus the yen and a one-week high versus the dollar, boosted by news that the UAE's central bank is considering putting more of its reserves into euros. The bank said that Sunday it was looking to convert up to 10 per cent of its foreign exchange reserves from dollar into euros--double the target it had previously set. The reserves were estimated at $23 billion in December and are held almost entirely in US Dollar.
The dollar retreated from a one-month high against the yen and a 10-week high versus sterling, which it hit at the end of last week after the news of a 243,000 rise in February non-farm payrolls boosted US rate hike expectations. The Euro also hit a seven-month high versus sterling and a 2-year high versus the Swiss franc.
In the middle of the week, the dollar stayed close to a one-week low hit earlier against the euro on Wednesday, with investors looking to a raft of US data for clues on how much further the Federal Reserve is likely to raise interest rates.
The yen fell Thursday after the Bank of Japan governor said it was too soon to raise rates from near zero, suggesting the cost of borrowing is unlikely to rise yet while US and euro zone monetary policies are tightened. BOJ Governor Toshihiko Fukui's comments, coming after the central bank abandoned its super-loose monetary policy last week, drove the yen down to the day's lows against the dollar and the euro.
Commercial Bank of Ceylon
In the last week, the call money rate was quite steady. On the last day of the week, the call rates shot up to even 14.50 per cent. Local money market dealers are expecting a lower range in the call money rate at the beginning of the new week. The inter-bank call money rate for banks hovered between 12.00 per cent and 14.50 per cent. Bangladesh Bank has injected Tk 2.9050 billion in the money market by accepting less Treasury bills than maturity. But this inflow had no impact on the local call money rate.
Last week, Tk 7.6430 billion T-bills were accepted by the
Bangladesh Bank, while maturity of the previously accepted T-bills was Tk 10.5480 billion. Bangladesh Bank accepted only 28-days, 91 days and 364 days T-bills. Yield of 28-days T-bills was at 7.05 per cent, yield of 91 days T-bills was at 7.20 per cent, and yield of 364 Days T-bill was at 7.90 per cent. On average, yield of T-bills in the past week was slightly higher compared to the previous week.
In the local foreign exchange market, the US Dollar's value dropped against Bangladeshi taka due to increased inward remittance and decreased demand for large import LC settlement. Some nationalised commercial banks and a few foreign banks sold foreign currency to the local banks to meet their LC related obligation. The local Foreign Exchange dealers speculate the US Dollar/Bangladeshi taka exchange rate to be stable in the coming week.
US Dollar/Bangladeshi taka exchange volume has significantly gone up due to direct sale of US Dollar/Bangladeshi taka by a local bank. In the last week, the daily average volume of US Dollar/Bangladeshi taka transaction was US$ 2.25 million against US$ 0.80 million in the week before. The increment is almost 181.25 per cent.
The US Dollar/Bangladeshi taka selling rates for importers of major Foreign and Private Banks ended higher at 69.97/72.24, while US Dollar buying rates from exporters were at 69.00/71.17.