The government is poised to reject high yields in treasury auctions to curb rising bank-lending rates, signaling a shift in interest rate policy. Recent auctions saw the auction committee accepting bids within targets, stabilizing treasury auction yields. Rising government securities rates could prompt banks to invest more, crowding out lending.
Amid concerns over lending rate spikes, the central bank assures a cap of 14%. Business leaders urge policy consistency to mitigate fund cost fluctuations. Dhaka Bank’s CEO warns of increased pressure on lending rates due to rising treasury rates. Private banks anticipate challenges in maintaining lending rates within the set limit if treasury rates continue to rise. Additionally, private-sector credit growth dipped to 9.9% in April from 11.28% last year, following a similar trend in March.
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