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Bangladesh Bank reassures trade balance stability and loan interest rates

EditorRachael Rajan
Published 09/19/2023, 03:38 AM
USD/GBP
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A recent meeting between the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and Bangladesh Bank (BB) concluded with assurances from BB Governor Abdur Rouf Talukder on maintaining the stability of the dollar rate and loan interest. The meeting took place on Monday, with discussions revolving around the current trade balance, loan interests, and the challenges faced by small to medium-sized businesses.

BB Executive Director and Spokesperson Md Mezbaul Haque stated that given the current trade balance, the dollar price should not be high. He clarified that the dollar rate is determined by the Bangladesh Foreign Exchange Dealer's Association (BAFEDA) and Association of Bankers, Bangladesh (ABB), with BB working within these set rates.

FBCCI President Mahbubul Alam expressed concerns about traders having to open Letters of Credit (LCs) by purchasing dollars at a higher price than the fixed rate. In response, Governor Talukder assured that everyone would receive dollars at the fixed rate.

On the topic of bank loans, the FBCCI president urged for no increases in interest rates. The governor responded stating that current loan interest is fixed according to a smart rate system, ruling out any abnormal hikes. However, he noted a slight rise could occur following this system.

The meeting also addressed the opening of LCs for small and medium businessmen. Governor Talukder assured that these businesses can open LCs, with banks receiving instructions to facilitate this process.

Women entrepreneurs were a focus point of the discussion. The FBCCI president highlighted that women entrepreneurs currently need a male guarantor - a father, brother or husband - to secure a loan. He requested central bank intervention in this matter to allow women to act as guarantors. Governor Talukder assured that measures were being taken to ease access to loans for small and medium women entrepreneurs, with banks recently instructed to accept women as guarantors.

The FBCCI president also urged an increase in bank loans to a maximum of Tk50 lakh for small and medium women entrepreneurs. Governor Talukder responded by highlighting the central bank's ongoing efforts to facilitate women's access to loans and increase their participation in economic activities.

In view of global economic instability and recent events like the Covid-19 pandemic and the Ukraine-Russia war, the FBCCI president called for loan rescheduling facilities for all sectors. He also requested that the interest rate not be increased to maintain the competitiveness of Bangladeshi products in foreign markets.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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