BB revises interest rate policy on short term foreign currency loans

The central bank has revised interest rate policy on short-term foreign currency loans linked with global bench mark rate, officials said.

Under the revised policy, the banker are allowed to fix the interest rates on buyers'/suppliers' credit at six-month LIBOR (London Inter-bank Offered Rate) plus maximum 3.50 per cent instead of earlier maximum 6.0 per cent.

"The revised rate structure shall continue until further instructions," the Bangladesh Bank (BB) said in a notification on Sunday.

Talking to the FE, a BB senior official said that the central bank revised its policy on usance interest rate against import under suppliers'/ buyers credit to facilitate the country's business community.

"We expect that businessmen will be able to receive such foreign currency loan with lower interest rate in the near future following the revised policy," the central banker explained.

Currently, such loans are being received in foreign currency from overseas sources on the basis of local bank guarantees mostly at an interest rate ranging between 5.50 per and 6.00 per cent.

The businessmen are now allowed to avail such credit to import capital machinery and industrial raw materials, according to another BB official.

He also said such floating interest rate will be applicable for discounting of usance export bills.

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