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PRESENTATION

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GROUP PROFILE
Group:02
Name ID
Md. Rayhan Uddin M 160203702

Md. Shamim Hossain M 160203703

Marufa Rahman M 160203719

Asaduzzaman M 160203728

Rana Sarker M 160203741

Mithun Kumar Dash M 160203744

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 1st Presenter
Md. Shamim Hossain
Id: M 160203703

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 Presentation
On
The Role of money market to economic
growth in Bangladesh
Objective:

1. To evaluate role of the money market to

the economic growth of the country.
2. To investigate the role of money market
in financial development in Bangladesh

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Methodology
Newspaper
Journal or Articles
Class Lectures
Internet
Books
Bangladesh Bank Annual Report
DSE publications
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Money Market & its Background from
Bangladesh Perspective
Money market is an integral part of the financial market of a country.
The money market in Bangladesh is its transitional state
continuous efforts are being made to develop appropriate and
adequate instruments to be traded in the market
The role of the financial market and institutions in the economic
development of Bangladesh the banking sector has triggered a
tremendous growth
The money market was the major constituent part of the financial
market of the country
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Characteristics of Bangladeshi Money market & its
Participants
It provides a medium for the redistribution of short-
term loan able funds among the financial institutions
Interbank repo based lending, BB's repo, reverse repo
auctions, BB bills auctions, treasury bills auctions are
primary operations in the money market, there is also
active secondary trade in treasury bills (up to 1 year
maturity).
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 2nd Presenter
Asaduzzaman
Id: M 160203728

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Money Market Participants
Government Treasury Department
Central Bank
Commercial Bank
Business
Investment and Securities Firm
Investment Companies/Bank
Finance Companies
Insurance Companies
Pension Fund etc
Individuals 10
 Money Market Instruments
Treasury Bills (T-Bills)
Repurchase Agreements (Repo or Reverse Repo)
Commercial Papers
Call Money Market
Negotiable Instruments
Certificate of Deposit
Banker's Acceptance
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 Treasury Bills or T-Bills
Treasury Bill
Types
Participants
Selling system
Secondary Market
Procedure to allot T-Bills

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 3rd Presenter
Marufa Rahman
Id: M 160203719

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How T-bill price varies depending on economic condition
Investors' risk tolerance affects T-bill prices.
T-bill prices tend to drop when other investments
seem less risky and the economy is in expansion.
During recessions, investors may decided that T-
bills are the safest place for their money, and
demand could spike.
T-bills are seen as extremely secure, as they are
backed by the full faith and credit of the govt.

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CP: Its impact on the economy
Commercial paper market is experiencing rapid growth
in Bangladesh for the last couple of years owing to its low
cost and easy access.
It fosters the goal of reducing cost of borrowing which
can stimulate growth
There are limited investment opportunities in the
financial market of Bangladesh. Often banks remain
overburdened with surplus liquidity and heavily dependent
on government securities amid low credit growth in the
economy
CP can broaden investment opportunities as it provides
additional instrument to the investors. Thus, it can play an
important role for development and growth of sustainable 15
financial market
Significance of Repo & Reverse Repo Rate to the
Economy
With lower repo and reverse
repo rates, industry gets to
borrow more and even gets to
pay lower interest rates on its
borrowing. Therefore, those
businesses that are in a position
to secure additional lending
from the banking system will
benefit from lower repo and
reverse repo rates
In case of inflation, BB will
try to reduce the amount of
money in circulation by
increasing the repo Rate.
When repo rates are
increased, banks will borrow
less and hence the amount of
money they will be lending
to the public also decrease &
Vice Versa 16
Present Call Money Market & its functions
Call money market
ranging from 3.67 percent
to 5.71 percent with minor
fluctuations during FY16

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 4th Presenter
Mithun Kumar Dash
Id: M 160203744

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Call money market: A safe-haven for NBFIs
Call money market has become a good place for NBFIs as the
rate remains very low compared to lending rates of NBFIs
since long
They borrow money from call market and lend the same to
their clients at higher rates
Non-bank financial institutions and ardent tasks to develop the
financial system in an economy like Bangladesh

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Significance of Call money Market to the Economy
It enables the banks & institutions to even out their
day to day deficit-surpluses of money
The banks borrow funds from other banks to finance
the shortfall created during festival-time demand
It helps ease the liquidity shortage in the banks.

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Other Money Market Instruments
Negotiable instruments
Promissory Note
Bill of Exchange
Bankers Acceptance
Certificate of Deposits

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 5th Presenter
Md. Rayhan Uddin
Id: M 160203702

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The role of money market to economic growth
Meeting Liquidity Purpose
Encouragement to saving & Investments
Financing Industry
One of the controlling measure of
inflations
Profitable investments
Self Sufficiency of commercial Bank
Help to Bangladesh Bank
Financing Trading 23
The role of money market to economic growth
Provide a parking place to employ short term
surplus funds.
Provide a reasonable access to users of short-
term funds to meet their requirement quickly,
adequately at reasonable cost
Provide room for overcoming short term
deficits
Formulation of suitable monetary policy
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Sources of finance to government.
Findings
Money markets play a key role in banks liquidity
management and the transmission of monetary policy
The development of the money market improves the
progress of financial intermediation and boosts lending
to economy, hence improving the countrys economic
and social welfare
It provides a medium for the redistribution of short-
term loanable funds among financial institutions,
which execute this function by selling deposits of
various types, certificates of deposits, and discounting
of bills, treasury bills etc
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Findings (cont.)
To foster liquidity in the market, the Treasury issues
securities consistently and predictably through a regular
schedule of auction
CP is issued by highly rated companies to raise funds for
funding operating expenses as well as current assets such as
account receivables and inventories
Repo & Reverse Repo is used as an indirect monetary tool
for day to-day liquidity management to smoothen temporary
and unexpected disturbances in the supply and demand for
money
In case of inflation, BB will try to reduce the amount of
money in circulation by increasing the repo Rate
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Findings (cont.)
The call money rate is the interest rate that banks charge other banks or financial
institutions on overnight loans
Money market funds provide valuable liquidity by investing in commercial paper,
and repurchase agreements
Money market helps the industries in securing short-term loans to meet their working
capital requirements through the commercial papers
The sensitive and integrated money market helps the central bank to secure quick and
widespread influence on the sub-markets, and thus achieve effective implementation
of its policy.

Thus money market contributes to the growth of Economy of Bangladesh.

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 6th Presenter
Rana Sarker
Id: M 160203741

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Recommendations & Conclusion
Thus money market contributes to the growth of Economy of Bangladesh.
it provides an equilibrating mechanism for demand and supply of short-term
funds
it enables borrowers and lenders of short-term funds to fulfill their
borrowing and investment requirements at an efficient market clearing price
, it provides an avenue for central bank intervention in influencing both
quantum and cost of liquidity in the financial system, thereby transmitting
monetary policy impulses to the real economy

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Recommendations
As excessive money market volatility could deliver confusing signals about
the stance of monetary policy, it is critical to ensure orderly market behavior,
from the point of view of both monetary and financial stability
In addition to the existing approved investors, firms, companies, corporate
bodies, and non-resident Bangladeshis should be allowed to participate in
auctions of treasury bills which leads to help in our economy
The objective of monetary management by the central bank might align
money market rates with the key policy rate

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THANKS!
Any questions?

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