Bangladesh Bank has scrapped the 360-day special repo facility due to the improvement in the coronavirus situation and a lack of demand for the borrowing tool.
The central bank introduced the special repo facility on May 13, 2020, in order to implement the stimulus packages and to ensure smooth liquidity management, as per a circular issued on Tuesday.
According to BSS, a repurchase agreement, or repo, is a short-term agreement to sell securities in order to buy them back at a slightly higher price.
Under the special repo, banks and financial institutions were able to borrow against additional treasury bills and bonds of statutory deposit rate with the central bank.