Bangladesh Bank (BB) on Thursday increased its lending interest rate on a 50-point basis to tame the growing trend of inflation.
The Banking Regulations and Policy Department (BRPD) of the central bank issued a circular in this regard on Thursday, reports UNB.
The central bank has increased the lending rate of banks by 50 basis points to 10.70 percent from 10.20 percent.
The method based on which the loan interest rate is now being determined is known as ‘SMART’ or Six Months Moving Average Rate of Treasury Bills. The central bank informs this rate at the beginning of every month.
Md Mezbaul Haque, spokesperson and executive director of the BB, told reporters that banks can now add 3.50 percent with the reference lending rate, which is also known as the SMART rate of 7.20 percent.
For pre-shipment export loans, banks can add 2.5 percent with SMART, which was 2.0 percent earlier.
The BB increased the lending rate after increasing the policy rate (repo rate) by 75 basis points to fight inflation.
According to the new guidelines, banks can provide loans in the month of October by adding margin or interest at a maximum rate of 3.5 percent with the ‘smart’ rate of September.
In the current month, a maximum of 10.70 percent interest can be taken from banks for large loans. The interest rate on pre-shipment export credit will be 9.70 percent. In case of agricultural and rural loans, the maximum interest can be charged as before—9.20 percent, the circular stated.