Import duty on edible oil goes

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FE Report
Finance Adviser Dr Mirza Azizul Islam said Sunday the government has decided to withdraw customs duty on import of edible oil in view of its soaring prices in the local market.
The National Board of Revenue (NBR) would issue a circular in this regard within a day or two, he told the reporters at a briefing at his Planning Ministry office.
NBR Chairman Muhammed Abdul Mazid, also present at the briefing, informed that there was 10 per cent duty on edible oil.
Replying to a question, Aziz expressed the hope that prices of edible oil should come down following the duty withdrawal. The price in the international market has also declined, he pointed out.
"Let's follow the impact first," he said, replying to another question whether the government would go for action, if the price of edible oil does not come down with the government gesture.
Meanwhile, the Bangladesh Bank (BB) has instructed the commercial banks to charge maximum 12 per cent interest against import of powdered milk for the time being to curb the price hike of the item in the local markets.
The central bank took the measure against the backdrop of the soaring prices of powdered milk in the local market. Such price hike of the essential has been mainly due to short supply, caused by escalating prices in the international market.
"We have taken the measure temporarily to arrest the price hike of the essential in the local market," a BB senior official told the FE Sunday.
He also said the central bank is hopeful that the consumers would benefit following the measure.
The central bank issued a circular in this connection Sunday and asked the chief executives of all scheduled banks to follow the instructions on interest rates for import financing.
Currently, the lending rates on trade financing ranges between 12 per cent and 16.50 per cent while export credit is offered at seven per cent.
On August 14 last, the central bank through a similar circular instructed the commercial banks to charge interest rates at maximum 12 per cent on import of ten essential commodities including rice, wheat, sugar, edible oil, gram, lentils, pulses, onion, spices and date.
"We will certainly carry out the BB's instruction but our profitability will come under pressure," a senior official of commercial bank told the FE.
Under the Financial Sector Reform Programme, the banks are free to fix their deposit and lending rates other than export credit. At present, loans at reduced rates (7.0 per cent) are provided for all sorts of export credit since January 2004, the central bank said.
Currently, interest rates fluctuate up to 3.0 per cent considering relative risk elements involved among borrowers in the same lending category.