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BB reduces interest rate on export credit to 9%

UNB . Dhaka
27 Jul 2023 19:40:53 | Update: 27 Jul 2023 23:05:58
BB reduces interest rate on export credit to 9%

The Bangladesh Bank (BB) has cut interest rates by 1.0 per cent to 9.10 per cent for pre-shipment loans in the export sector.

The Banking Regulations and Policy Department of the central bank issued a circular on Thursday reducing the interest rate considering the global challenges for the export sector due to the Russia-Ukraine war.

The circular stated that determining the interest rate on pre-shipment export credit, the interest rate shall be determined by adding a maximum margin of 2 per cent to the 'SMART' system.

The BB implemented the new structure of interest calculation on July 1. In this system, banks can calculate interest on loans by adding a maximum of 3 per cent with 'SMART' (SMART-six-month moving average rate of 182-day treasury bills). However, it has been reduced to 2 per cent for pre-shipment export credit.

According to the BB, the average rate of 182-day treasury bills is 7.10 per cent. If the banks add 2 per cent of the pre-shipment export loan to this, the maximum loan interest rate will be 9.10 per cent.

The central bank on Thursday sent this instruction to the banks and asked for immediate implementation.