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Independent Review of
RBD
Bangladesh's Development
Increasing Trend of Call Money Rates
The monthly average call money market borrowing and lending rates have both increased
sharply from 2.66% in March 2022 to 4.58% in April 2022.
☐ The increasing trend of call money rates implies that the demand for cash, particularly by under-
capitalised banks, has been high.
□ On 29 May 2022, the central bank the repo rate from 4.75% to 5%, whereas the reverse repo
rate remained at 4%.
☐ Since the weighted average monthly call money rate in April 2022 exceeded the reverse repo rate,
the effectiveness of monetary policy may be compromised.
Figure: Repo, reverse repo and call money rates (in %)
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Repo rate
Reverse repo rate
Weighted average monthly call money lending/borrowing rate
CPD (2022): State of the Bangladesh Economy in FY2021-22 (Third Reading)
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