BB reduces repo auctions to one day a week

The Bangladesh Bank (BB) has further reduced the repo auctions for banks to one day a week for implementation of the monetary policy.

The new measure will be effective from November 1 this year, the central bank said in a circular today.

The BB from the beginning of July this year cut the days of auctions of repo–a window by which banks borrow funds from the central bank–to two days a week from the previous daily basis, as part of a condition of the $4.7 billion loans by the International Monetary Fund (IMF).

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Five crisis-hit banks secure BB guarantee for liquidity

Husne Ara Shikha, executive director and spokesperson of the BB, said the repo auctions have been reduced for better implementation of the monetary policy. 

The BB said it will lend to the banks against instruments for seven days, 14 days and 28 days tenure.

"This will enable banks to plan well," she said. 

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Policy rate hiked to 9.5%

Under repo auction, banks borrow from the central bank against the government securities with the condition that they would buy the securities back at a specific date, usually for a higher price, to get funds and meet their liquidity requirements.