Excess liquidity in banks declined in January

Dhaka, March 22 -- Excess liquidity in the banking sector fell by 5.38% to Tk154,000 crore at the end of January compared to December 2023.

This decline follows a pattern of fluctuations, with the volume of excess liquidity at Tk161,000 crore in December, Tk141,000 crore in November and Tk159,000 crore in October of 2023, according to Bangladesh Bank data.

Of the surplus liquidity in the banking sector, more than 80% was in the form of securities, including treasury bills and treasury bonds.

Banks have been facing a severe liquidity shortage due to factors such as high defaulted loans, increased dollar sales by the central bank, low deposit growth and a high volume of cash held outside banks.

To alleviate the liquidity shortage, many ba...