The central bank will lend money by depositing dollars

Bangladesh Bank

Several banks have stockpiled dollars keeping in mind the possible dollar crisis. On the other hand, there is a cash crisis in all these banks. A bank has extra cash. Bangladesh Bank is going towards currency swap framework to facilitate them in such situation.

 

In such a way, banks facing liquidity crisis can deposit dollars in Bangladesh Bank and withdraw money. If the crisis is resolved, the bank can return the money to Bangladesh Bank and take back the dollar. The central bank will soon introduce such a system.

 

Mezbaul Haque, executive director and spokesperson of Bangladesh Bank, told reporters after the bankers’ meeting on Wednesday (January 31).

 

Spokesperson said, commercial banks have more foreign currency. But he has no cash. In this case, it appears that dollars have to be sold to meet the cash crisis. Even if you sell the dollar again, there is a risk. Because, he is worried about getting dollars to pay his next payment. So the central bank is moving towards a currency swap framework with banks. So that you can withdraw money by keeping it in dollars at the central bank. He will take his dollars with money when needed.

 

Mezbaul Haque also said that banks take liquidity only when there is a crisis, not so. It borrows from the central bank for its daily operations. It is an ongoing process. The central bank will always lend this money

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