Dhaka, Mar 09 (V7N) – The Bangladesh Bank is actively buying surplus US dollars from commercial banks and lending them back to the market, boosting liquidity in the banking system. However, despite this increase, investment demand has remained sluggish.

Officials say that political uncertainty and other factors have contributed to slow private-sector credit growth, which fell to 6.1 percent in December. In the current fiscal year, the central bank purchased $4.9 billion from various banks and injected Tk 60,000 crore into the market, increasing overall liquidity.

To discourage banks from parking excess funds with the central bank, the Bangladesh Bank has reduced the interest rate on the standing deposit facility (SDF) by 100 basis points in two phases, bringing it down to 7.5 percent.

Economists note that while liquidity is available, the hesitation to invest underscores broader economic uncertainty and the need for stronger incentives to spur private-sector growth.

END/SMA/AJ