The Bangladesh Bank has assured business leaders that lending rates will not exceed 14%, even under the new market-driven interest rate regime introduced to meet IMF conditions for a $4.7 billion loan. This regime allows banks to set interest rates based on market demand and supply.
The central bank indicated that good borrowers might see rates as low as 13%. Additionally, businesses will be able to buy US dollars at Tk 117 per dollar for opening letters of credit. However, some banks have already raised rates above 14%. The central bank emphasized that rates above 14% are unjustified, given that the cost of funds is between 6% to 7%.
Business leaders also discussed the financial strain from the increased exchange rate and requested not to raise interest rates further to maintain competitiveness. They recommended leaving the US dollar exchange rate to market forces while ensuring a steady supply of dollars to support import activities.
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