Credit growth to the private sector had recorded a significant 25 per cent rise in the fiscal 2008 (FY08) against that of the previous year.
The rise was mainly due to recovery of losses caused by natural disasters and global price hike of imported goods.
"The credit flow to the private sector increased in the last fiscal due mainly to the rise in financing major productive sectors and imports to recover the losses caused by natural disasters and price hike of oil and essential items in the international markets," a senior official of the central bank told the FE Wednesday.
He also said the credit growth to the private sector usually depends on the demand, which originates from the overall economic activities across the country.
"We expect that the existing trend of the private sector credit will continue at least for the next five months in line with the ongoing monetary policy of the Bangladesh Bank (BB)," the official observed.
On July 17 last, the central bank unveiled its sixth half-yearly monetary policy aiming to achieve maximum economic growth through expansion of credit to productive sectors for the current fiscal by keeping inflationary pressures under control.
Credit to the private sector rose by 25.18 per cent to Tk 379.62 billion in July-June period of FY08 from 15.12 per cent to Tk 197.98 billion of the previous fiscal, according to the central bank statistics.
The country's overall import crossed the US$20 billion-mark in the last fiscal for the first time resulting from crop losses by natural disasters and price hike of oil and essential commodities in the global market.
In fiscal FY08, two floods and a devastating cyclone that hit the country were mainly responsible for higher import of essential items including food grains, officials said.
Besides, the central bank earlier asked the commercial banks to increase investment in the productive sectors, particularly agriculture, small and medium enterprises (SMEs), construction sector, infrastructure, and other rural activities, for recouping the losses caused by floods and cyclone.
The industry, import financing, construction, transportation and communications and agriculture sector have received the lion's share of the private sector credit, they added.
On the other hand, a senior official of a private commercial bank (PCB) said the upward trend in private sector credit may come down slightly in the next quarters because of declining trend in the prices of petroleum products and those of some essentials items in the international markets.
"Some banks will also try to improve their overall liquidity positions by the end of this calendar year. As a result, the credit flow to the private sector may fall in the near future," he noted.
