Bangladesh Bank has recently announced a notable change in lending rates for key export support programs. In a move to align with evolving market dynamics, the central bank has raised the interest rates on loans from the Tk5,000 crore Pre-shipment Refinance Scheme and the Export Facilitation Pre-finance Fund (EFPF), both designed to support export-oriented industries during the Covid-19 pandemic. Effective from August 13, the revised policy entails a customer-level interest rate of up to 5% for pre-shipment refinance loans, marking a significant increase from the previous rate of 3.5%. Meanwhile, the interest rate charged by banks for such loans has surged from 0.5% to 2%. Similarly, the customer-level interest rate for EFPF loans has been elevated from 4% to 5%, accompanied by an augmented 2% interest payable to the central bank on fund withdrawals by banks, up from the prior 1.5%. These changes aim to synchronize the lending rates with the market-based interest rate policy introduced on July 1 of the same year.
Initiated on April 13, 2020, the Tk5,000 crore pre-shipment refinance scheme was a proactive measure by the central bank to mitigate the Covid-19 impact. Tailored to cater to the pre-shipment expenses of export commodities, the scheme aimed to alleviate financial stress for export-oriented enterprises. While the standard interest rates for export loans typically ranged between 7% to 8%, this recent adjustment underlines Bangladesh Bank’s commitment to fostering an adaptable and resilient financial environment.
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