Central Bank Of Bangladesh Continues Overdraft Facilities For Clearing Oil Import Bills

August 4, 2008 11:03 a.m. EST

Dhaka, Bangladesh (AHN) - The central bank of Bangladesh continues to offer overdraft (OD) facilities to the commercial banks, particularly the state-owned commercial banks (SCB), for settlement of oil import bills.

Bangladesh Bank (BB), the country's central bank, provided OD facilities for $6.0 million on Monday to help one SCB clear its oil import bills, officials said.

"We've provided the SCB such facilities against reverse repurchase agreement (repo) to settle import payment bills for petroleum products," a BB senior official told AHN in the capital, Dhaka.

The BB sanctioned the OD facilities for $22 million to two SCBs during the last week for settlement of their fuel oil import bills, they confirmed.

The central bank of Bangladesh has continued its intervention in the inter-bank foreign exchange market by selling and buying U.S. dollar directly and providing such short term facilities to the banks aiming to keep the market stable.

As part of the intervention, the BB has bought $9.50 million from the commercial banks recently to keep the country's foreign exchange market stable.

On the other hand, the central bank has started intervention in the market by selling the U.S. currency directly to the commercial banks since October 29, 2007 to keep the market steady.

The central bank has since sold $735 million to the commercial banks as part of its intervention in the market, the officials noted.