FBCCI asks BB to keep interest rate tolerable

The Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) have asked for a fixed rate of dollar and urged the Bangladesh Bank not to increase the interest rate by much, to maintain a sustainable business environment in the country, UNB reports.

FBCCI president Mahbubbul Alam on Monday placed these requests to Bangladesh Bank (BB) governor Abdur Rouf Taluder, during a meeting between the them.

“We met with the central bank governor with a delegation of top businessmen and expressed our concern on the important issues on behalf of the country’s business community,” the FBCCI president told the news agency after the meeting.

He said many traders had to open letter of credit (LC) buying dollars at a higher price than the fixed rate, which impacts import of goods.

The BB’s governor has been requested not to increase the interest rate of bank loans by large margins as the businesses are already facing difficulties in the depreciation of domestic currency taka, Mahbub said.

The governor assured the businesses that the interest rate is now fixed based on the smart rate system and there is no option to increase the interest rate to an abnormal level in the current system, sources present in the meeting said.

In the new system, the lending rate for banks will be determined at SMART (six-month moving average interest rate) plus a margin of up to 3 per cent.

The SMART reference lending rate would be fixed on the basis of the 182-day treasury bills and announced on the first working day of each month. The central bank controls the interest rates of T-bills and T-bonds.

Referring to the system the FBCCI president said, "We are very concerned about the rising interest rate and sought cooperation from the Bangladesh Bank to keep the interest rate at a tolerable level."

He said businesses are finding it difficult to open letters of credit (LCs) as they are not getting the dollar at Tk 110, a rate fixed by the Bangladesh Foreign Exchange Dealers Association (BAFEDA) and the Association of Bankers, Bangladesh (ABB).

Although a number of importers are getting the dollar at the fixed rate, many others are being compelled to cough up an additional amount to open the LCs, the FBCCI alleged.

Executive director and spokesperson of BB Md Mezbaul Haque said businessmen expressed their concerns about the interest rate.

The governor assured them that the interest would not be raised much, he added.