The central bank sources said the BB withdrew the amount yesterday from a nationalised commercial bank (NCB) as a security against an overdraft in dollar. The overdraft was issued to the NCB to import petroleum products.

BB withdrew Tk 444 crore from the cash-starved market through reverse Repo on Thursday.

Meanwhile, call money rate hit highest 38 percent yesterday. However, banking sources said the central bank made indirect interventions to keep the call money rate lower.

The inter-bank call money rate on Thursday skyrocketed to an all-time high of 150 percent, forcing the BB to ride roughshod over its own norms and enforce a 40 percent rate cap for the day to stabilise the volatile market, warning the banks of punishment if the cap was violated.

According to BB's Major Economic Indicators: Monthly Update (March edition), excess liquidity of the scheduled banks stood at Tk 5,536.69 crore at the end of January 2006 compared to Tk 10,941.61 crore at the end of June 2005.

Sources in banks said the excess liquidity dropped further in the recent times.

Usually, the call money rate does not exceed 10 percent. But, as the BB since early March has more frequently been using reverse Repo to withdraw money from the market, a liquidity crisis emerged, pushing the call money rate up to a range between 15 and 40 percent in the recent days.

Bankers said present trend of facing liquidity crunch will not go shortly rather it will linger.

Central bank officials explained the money market is being dried up as part of a tight monetary policy to check the rising inflation and lessen pressure on balance of payment.