Most banks quoted Thursday's rates for dollar, true to the forecast of economists and bankers who allayed fear of volatility.

Three dollar-taka inter-bank deals were cut on the day by Agrani Bank, HSBC, Citibank NA and Bank Asia. They quoted rates at Tk 58.65 a dollar against Thursday's Tk 58.62.

However, bankers said the real impact would be felt tomorrow since the international markets are closed on Saturday and Sunday. Even then, chances of volatility are extremely slim.

The BB aggressively applied Reverse Repo at 9.5 per cent and Repo at 20 per cent to mop up excess liquidity from the market. Two nationalised commercial banks (NCBs) had to respond to the Reverse Repo. The aim was to force the banks to offload their dollar stocks to meet liquidity crunch so that no-one can manipulate the market.

This pushed up call money rate to as high as 31 per cent.

"This is a standard procedure -- when you have to peg down the external sector, you need to heat up the domestic sector," said a BB high official. "The job was easy for us as the banks are not allowed to hold a very large open position overnight, which means they cannot have a dollar stock beyond a certain limit depending on their capital size. As a result, they cannot hold on to dollar and push rates up."

He also overruled speculation chances on Monday since all dollar-taka transactions have to be backed by valid business deals.

The BB met the bankers yesterday to get their reaction on the first day situation after free-float of taka and said it will keep up its market vigil.

Some bankers said while the free-float was a timely step, the central bank should also open up the forward market. The BB said any forward sell of dollar should be against forward purchase, but bankers pointed out that exporters are not inclined to forward sell because of the historic trend of taka losing its value. They said forward sell against spot purchase would help them in business.