The Bangladesh Bank provided more than Tk聽25,000 crore to banks on Wednesday after banks reopened after a three-day general holiday.
The government announced general holiday for Sunday, Monday and Tuesday, keeping offices, including banks, shut amid a curfew it imposed across the country from midnight past Friday, due to unrests centring quota reform protests.
The country had also faced an internet blackout since July 18 that halted digital and mobile financial services.
Broadband internet connection was partially restored in the Dhaka city at about 9:00pm on Tuesday.
Banks remained closed for five days as Friday and Saturday were weekly holidays, and customers were unable to withdraw money through automated teller machines or mobile financial services due to the internet shutdown and the curfew.
Upon reopening on Wednesday, banks faced significant cash withdrawal pressures, prompting them to borrow from the central bank.
On Wednesday, the central bank provided banks a total of Tk聽25,521 crore that highlighted the severity of the liquidity crisis.
The Bangladesh Bank reported that in an auction on the day, Tk 5,707 crore was provided to 14 banks and two financial institutions under the seven-day repo facility, Tk聽2,370 crore to nine banks under the 14-day repo facility and Tk聽7,197 crore to 12 banks and two financial institutions under the 28-day repo facility.
It said that Tk聽5,691 crore was given to three banks under the 180-day assured repo facility and Tk聽3,774 crore was provided to 11 primary dealer banks under the one-day assured liquidity support facility.
Furthermore, Tk 497 crore was lent to a bank under the 14-day Islamic banks liquidity facility and Tk 984 crore was lent to five Islamic banks under the 28-day facility.
The Bangladesh Bank stated that the interest rates for borrowing were 8.60 per cent for seven-day terms, 8.70 per cent for 14-day terms and 8.75 per cent for 28-day terms.
The assured repo and assured liquidity rates were 8.50 per cent, while the profit rate for Islamic banks was 5.50 per cent, ranging from 3.25 per cent to 6.50 per cent for the 28-day term.
Bank officials said that many banks used the borrowed money to cover current account deficits with the central bank and to meet cash reserve ratio shortfalls.
Additionally, many banks provided cash to meet customer demand, which significantly increased at both branches and ATMs.
Banks have been struggling with severe liquidity shortage for the past couple of years due to increased dollar sales by the Bangladesh Bank amid a severe dollar crisis in the country鈥檚 banking system, rising non-performing loans, high interest rates in treasury bonds, poor deposit growth and alleged capital outflows.
