DHAKA, Oct. 22 (Xinhua) -- The Bangladesh Bank (BB) has lowered repo auction frequency, a window by which banks borrow funds from the central bank, to one day a week in a tight-fisting action evidently meant for better implementation of the monetary policy.
The latest contractionary monetary measure will be effective from Nov. 1 this year, the BB said in a circular Monday.
Husne Ara Shikha, executive director and spokesperson of the BB, told journalists that the repo auctions have been reduced to strengthen the money market and improve currency management.
The central bank of Bangladesh from the beginning of this fiscal year (July 2024-June 2025) reduced reportedly the five days of auctions of repo to two days a week as part of a condition of the 4.7 billion U.S. dollars loans by the International Monetary Fund (IMF).
Under repo auction, banks in Bangladesh 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 needs. ■