Call money borrowing jumps 31.6% in July

The country's banking sector relied more heavily on short-term borrowing in July 2025, with call money transactions climbing 31.6% month-on-month to Tk1.16 lakh crore, according to the Bangladesh Bank's Money Market Dynamics report.

Overnight borrowing continued to dominate, making up 84.9% of transactions, while short-notice lending accounted for 13.12% and term call money just 2.01%, as per the monthly publication published by the central bank's Monetary Policy Department.

Call money is the borrowing or lending of funds for a day. Banks usually borrow money from each other in three ways – call money loan for a day, short notice loan for two to 14 days, term loan for 90-180 days. 

Despite the surge, the weighted average rate (WAR) on overnight call money declined slightly to 10.03%, down 11 basis points from June. The overall call money WAR slipped 18 basis points to 10.14%, the report said.

Interbank repo turnover fell 5% to Tk30,332 crore in July. Overnight repos comprised 34.17% of the total, down from 46.1% in June, while two-day repos rose sharply to 14.6% from 6.07%. The WAR of interbank repo stood at 10.27%, 10 basis points lower than the previous month.

Central bank repo activity, however, increased during the month, with turnover reaching Tk1.55 lakh crore – around 3% higher than in June. Nearly 72% of this borrowing was in 14-day maturities.

Commercial banks also tapped into standing facilities during July. They borrowed Tk17,565 crore through the Standing Lending Facility (SLF), a sharp rise of Tk15,675 crore from the previous month.

Meanwhile, banks placed Tk26,146 crore in the Standing Deposit Facility (SDF), a significant fall of Tk46,583.32 crore compared to June.

The banking system additionally accessed Tk1,42,988 crore in special liquidity facilities, with around 85% of the funds provided as Assured Liquidity Support (ALS) for primary dealers.

Bangladesh Bank also issued Tk250 crore in 180-day BB bills at a 12% cut-off rate in July, 10 basis points lower than June, signalling a slight softening of market rates.

Government borrowing through treasury bills fell, with Tk34,000 crore worth T-bills issued in July, down 10.96% from June. The highest WARs reached 11.52% for 14-day bills, 11.92% for 91-day bills, 11.86% for 182-day bills, and 11.59% for 364-day bills.

According to the report, the latest data highlights a mixed trend in liquidity management across the banking sector, with rising reliance on call money and central bank repo, alongside reduced activity in interbank repos and government treasury bills.