BB lends Tk 25,521cr in a day to quell cash crunch
![BB lends Tk 25,521cr in a day to quell cash crunch](https://cdn.jagonews24.com/media/imgAllNew/BG/2023March/taka-20240725173604-20240725181706.jpg)
The Bangladesh Bank on Thursday pumped Tk 25,521 crore into the banking system to alleviate a severe cash shortage triggered by the ongoing quota reform protests and the subsequent internet outage.
The central bank's emergency intervention came as a five-day internet shutdown brought banking operations to a grinding halt.
ATM outages, server failures, and disruptions to mobile financial services fueled a surge in cash demand, leaving banks struggling to meet customer needs. To address the crisis, the central bank authorized a limited reopening of banks on Wednesday.
However, the central bank's lending came at a steep cost, with interest rates ranging from 8.5% to 8.75%. Bangladesh Bank officials attributed the unprecedented borrowing to increased cash withdrawals and ATM demands amid the ongoing protests.
The central bank disbursed the funds through various lending facilities, including the repo, assured repo, assured liquidity support, and Islamic banks liquidity facility.
A breakdown of the lending shows that Tk 5,007 crore was lent for seven days, Tk 2,370 crore for 14 days, and Tk 7,197 crore for 28 days under the repo facility.
Additionally, Tk 5,691 crore was provided under the 180-day assured repo, Tk 3,774 crore under one-day assured liquidity support, and Tk 1,481 crore under the Islamic banks liquidity facility.
The central bank's move is aimed at replenishing bank reserves and stabilising the financial system, but the high interest rates underscore the severity of the cash crunch.