Cenbank Bangladesh Bank has announced the interest rate on bank loans for April based on the ‘Six-Month Moving Average Rate of Treasury Bills’ (SMART) system.
The Banking Regulation and Policy Department of Bangladesh Bank (BB) issued a circular in this regard on Sunday.
In March, the SMART increased by almost 1 percent to 10.55 percent, up from 9.61 percent in February and 8.68 percent in January.
The stock markets ended on a high note Sunday amid price increases.
Banks will be permitted to add a maximum of 3.0 percent to the SMART number when signing loan agreements in April, down from 3.5 percent in March.
As a result, the maximum interest rate on bank loans will be 13.55 percent in April, while the maximum interest rate on consumer loans will be 14.55 percent, as banks can charge a 1.0 percent supervision fee for consumer loans.
In March, the interest rate on bank loans was 13.11 percent, while it stood at 14.11 percent for consumer loans. In February, the rates were 12.43 percent and 13.43 percent, respectively. In January, the rates were 11.89 percent and 12.89 percent.
As the SMART rate increased more than expected in March, Bangladesh Bank reduced the ‘SMART’ margin rate that banks are allowed to add by 0.50 percent in the interest of consistency with the monetary policy. The BB had previously cut the margin by 0.25 percent in February.
According to the new guidelines, the margin added for pre-shipment export loans and agricultural and rural loans will be a maximum of 2.0 percent in April, down from 2.50 percent in March.
Loans taken from banks for purchasing personal and consumer goods such as car loans, housing loans, and education loans, including refrigerators, TVs, and computers, are generally considered consumer loans.
Dr. Ahsan H. Mansur, Executive Director of the Policy Research Institute, commented to UNB that the central bank has no choice but to increase interest rates to control inflation.
He explained, “The interest rate hikes will continue until the inflation rate comes down to 5-6 percent. Only then will the interest rate stabilize.”
During this period, industries and personal borrowers will face challenges, but they must confront reality. Through this adversity, the economy will gain strength and stability.
