The Bangladesh Bank (BB) has increased the Cash Reserve Ratio (CRR) for commercial banks to 6.5 percent, a move that analysts say is aimed at containing inflation.
According to a BB circular issued on Monday, the decision would take effect from Tuesday (Jun 24).
The CRR is the minimum amount of the total customer deposits that commercial banks have to keep as reserves either in cash or as deposits with the central bank.
Former central bank chief Salehuddin Ahmed said that the move intended to curb inflation.
“The liquidity is very high now. Maybe, that’s why the Bangladesh Bank has raised the CRR, which will check the money supply in the market and, hence, will help contain inflation,” he told bdnews24.com on Monday.
According to BB’s latest data, the current amount of excess liquidity stands at Tk 1.35 trillion.
The point-to-point inflation rate in April stood at 7.46 percent and average inflation at 7.47 percent.
The current budget intends to keep average inflation within 7 percent, while the proposed budget for the next fiscal aims to keep it under 7 percent.
Source: Bd news24
