The central bank of Bangladesh on Thursday reduced the mandatory cash reserve ratio requirement undand Repo interest rate so that liquidity enhance into banking system.

Due to the relaxation and available liquidity the industrialist and moneyed man can get cash from banks for feed people and donate to Prime Minister Fund, Ibrahim Khalidh, Veteran banker told Business Mirror Friday.

It must create some flow which will help both industrialist and the government, he added.

“Due to the relaxation the government will able to get about Tk 13000 crore from the banking system, A. B. Mirza Azizul Islam is a Bangladeshi bureaucrat and the former Advisor of the Caretaker Government led by Fakhruddin Ahmed told Business Mirror.

On Thursday Bangladesh Bank issued a circular to reduce CRR rate to 4 percent of minimum two week average from the existing 5 percent.

Besides, the daily minimum average will reduce to 3.5 percent from the existing 4.5 percent. The new CRR rate will take effect on April 15, the circular said.

In an another circular it reduced .50 percent interest rate of repo from previous 5.75 percent to 5.25 percent.

Banks are required to maintain a percentage of their deposits as cash’s meaning that of year you deposit Tk 100 to your banks then bank cannot use the entire Tk 100 for lending or investment purpose. They have to maintain a portion of the deposit as cash and can use only the remaining amount.

On Sunday ,the government  announced four fresh stimulus packages worth Tk 67,750 crore to enhance its effort to overcome the economic losses due to the coronavirus situation.

Prime minister Sheikh Hasina announced the packages at a press conference at her official residence Ganabhaban 12 days after she came up with the first stimulus packages of Tk 5,000 crore for the export-oriented sectors.