At the end of April this year, excess liquidity in the banking sector stood at Tk201,546 crore, up from Tk198,400 crore a month ago

Surplus liquidity in the country’s banking sector, which began to decline from January this year, began rising again in April owing to the second wave of the Covid-19 pandemic.

At the end of April this year, excess liquidity in the banking sector stood at Tk201,546 crore, up from Tk198,400 crore a month ago, as per the latest data from the Bangladesh Bank.

Of the total, Tk90,038 crore was excess liquidity in the state-run banks, Tk89,955 crore in the private banks, and the remaining Tk21,553 crore in foreign banks.

The surplus fund, rose 78.35% in April compared to the same month a year ago, when the amount stood at Tk113,000 crore.

The demand for credit among businesses is still depressed owing to the second wave of the Covid-19 pandemic, which is one of the reasons for the increasing trend of excess liquidity, said bankers.

Also read - Surplus liquidity continues to fall despite slow credit demand

The increasing trend of remittance has also boosted the surplus liquidity in the banking sector, they added.

The amount of excess liquidity in the banking sector rose every month last year due to lower credit demand and the expansionary monetary policy announced by the central bank.

The central bank is also injecting funds into the financial sector with stimulus packages.

In July last year, to steer the economy away from a steep downturn, the Bangladesh Bank rolled out a vastly expansionary monetary policy for the 2020-21 fiscal year.

The central bank in February this year decided that the monetary policy would continue during the second half of this fiscal year as well.