Central Bank Of Bangladesh Continues To Provide Overdraft Facilities For Clearing Fuel Oil Bills

August 9, 2008 3:00 p.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 (SCBs), for settlement of oil import bills, officials said.

The Bangladesh Bank (BB), the country's central bank, provided OD facilities for $41 million during the last week to help at least two SCBs clear petroleum product import bills for its client, they added.

"We've provided the SCBs such facilities against reverse repurchase agreement (repo) to settle oil import payment bills," a BB senior official told AHN in the capital, Dhaka on Saturday.

The central bank will continue to provide such foreign currency support to the commercial banks mainly for making import payments of essential items, including fuel oils, the official added.

The BB 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 commercial banks aiming to keep the market stable.

As part of the intervention, the central bank has bought $9.50 million from the commercial banks recently.

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

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