The outbreak of COVID-19 has created a large-scale socio-economic impact on countries around the globe. According to World Bank’s Global Economic Prospects, June 2020 global GDP was expected to contract by 5.2 percent during 2020 and the pandemic is likely to have adverse effect over the coming years. This scenario can be seen from the chart; all types of economies are expected to experience slump in 2020 and recover by 2021. COVID-19 also shook up the Bangladesh economy, GDP recorded 5.24 percent growth in FY20, which was much lower than our budgetary target of 8.20 percent. Export declined by 16.93 percent at the end of FY20 while import decreased by 8.56 percent. Domestic consumption, private investment etc. suffered setback due to lower demand and prolonged lockdown. To deal with the economic fallout due to COVID-19 Bangladesh has announced a series of stimulus packages amounting close to BDT 1.11 trillion (about 4 percent of GDP 2019), consisting of both fiscal and monetary measures. Most of the packages are composed of bank loans using bank’s own capital with some support by Bangladesh Bank’s refinancing schemes. With a large part of the package channeled through the banking system, banks are faced with rising demand for bank lending. To contain the negative fallout from the COVID-19 outbreak, the focus of Bangladesh Bank (BB) is to ensure that there is adequate liquidity in the financial system to support the operations of banks. BB used its full range of tools to support the economy through the challenging time include reduction of the repo rate in two steps by 75 basis points (bps) to 5.25 percent and the cash reserve requirement (CRR) by 150 bps to 3.5 percent on a daily basis and to 4 percent on a bi-weekly average basis. CRR was cut to 1.5 percent (daily basis) and 2.0 percent (bi-weekly basis) for offshore banking operation and 1.0 percent (daily basis) and 1.5 percent (bi-weekly basis) for Non-bank Financial Institutions (NBFIs). BB expanded provision of the repo facility with a 360-day tenor special repo to support exporters, farmers and to facilitate the implementation of the government stimulus packages.BB initiates outright purchase of treasury bonds and bills from the secondary market at the market rate from banks and non-bank financial institutions after these institutions meet the statutory liquidity ratio (SLR). As some banks and financial institutions act as primary dealer of such securities, this will help ease their liquidity. BB raised the advance/investment-deposit ratio (ADR/IDR) by 2.0 percentage points, increasing ADR to 87 percent for the conventional banks, and IDR to 92 percent for the Shariah-based Islamic banks. Besides, BB announced a number of refinance scheme to support the flow of credit to the households and businesses.