BB announces special repo to help banks release coronavirus bailout funds

  • Abdur Rahim Harmachi, Chief Economics Correspondent, bdnews24.com
    Published: 2020-05-13 23:50:40 BdST

bdnews24

Bangladesh Bank has launched a special repo with a one-year term to boost cash flow and help the banks release the coronavirus bailout funds.

The facilities will be available only for lending from the bailout packages, the central bank’s debt management department said on Wednesday.

The central bank currently has repo with one-day, 14-day and 28-day terms. 

Bangladesh Bank’s auction committee will fix the rate for the special repo, the debt management department said.

The repo rate is the rate at which the central bank lends money to commercial banks in the event of any shortfall of funds.

A repo rate cut is an incentive for banks to borrow funds from the central bank.

The financial market regulator had in March cut the repo rate to 5.25 percent from 6 percent in an effort to boost liquidity amid the coronavirus crisis.

The government and Bangladesh Bank have so far pumped a total of around Tk 1 trillion into the coronavirus stimulus package.