The central bank has expedited its operations to mop up excess fund from the market using different monetary instruments for curbing inflationary pressure on the economy, officials said.

As part of the moves, the Bangladesh Bank (BB) Wednesday slashed assured liquidity support (ALS) for both primary dealer (PD) and non-PD banks, bypassing its previous directive.

Under the existing provisions, the PD and non-PD banks are allowed to enjoy liquidity support against both success and devolved securities for a maximum of two and a half months at a stretch from the date of issuance of government-approved securities.

"We've cut the ALS support slightly to withdraw excess liquidity from the market. But we have provided special repurchase agreement (repo) facility to both the PD and non-PD banks on the same day for complying with cash reserve requirement (CRR) of the central bank," a BB senior official told the FE.

He also said the central bank is using various monetary instruments in line with its latest monetary policy statement (MPS) to contain inflationary pressure on the economy.

On July 18, the BB unveiled its new half-yearly MPS, aiming to curb inflation further while ensuring adequate credit flow to the private sector for achieving 'inclusive' economic growth.

Both the PD and non-PD banks submitted requisition seeking Tk 14.57 billion as special repo in the late hours on the day to comply with the BB's CRR.

The central bank, however, accepted the special repo amounting to around Tk 9.0 billion, a PD said, adding that at least three private commercial banks may not be able to comply with the CRR.

Besides, the central bank is going to cut the tenure of ALS by 15 days - from the existing 75 days to 60 days, another BB official said.

"We're using the monetary tools to decrease the amount of reserve money (RM)," the central banker said.

News: The Daily Financial Express/Bangladesh/13th-Dec-12