The central bank has taken a measure to ease liquidity pressure of the primary dealers (PDs) through devolving a certain portion of fund under its each auction, officials said Tuesday.

Under the step, the Bangladesh Bank (BB) has taken 38 per cent of total fund of both treasury bills (T-bills) and bonds auctions on its own account.

"The new provision of devolvement relating to the government-approved securities will continue till the end of the current fiscal year (FY)," an executive director of the BB told the FE Tuesday.

He also said the central bank has introduced the new provision of devolvement since April 1 aiming to ease liquidity pressures on the country's money market.

"The liquidity pressures on PDs will be eased during the ongoing fourth quarters (Q4) of FY12 compared with the Q3 following the new devolvement provision," the central banker said.

The central bank has taken the latest measure against the backdrop of rising bank borrowing target by the government recently to finance the budget deficit of the current fiscal year ending June.

Under the revised target, the government can borrow Tk 279 billion from the country's banking system against the original budgetary target of Tk 189.57 billion.

Besides, the BB has restructured the auction amount of both bonds and T-bills at the ratio of 50:50 instead of 92.5: 7.5 earlier to minimise fund mismatch of the PDs.

Financial Express/Bangladesh/ 26th April 2012