Private sector credit growth fell slightly in April over the previous month, following a downward trend of imports due to lower prices of essential commodities including fuel oil in the global market.
The growth in private sector credit flow came down to 13.27 per cent in April from 13.63 per cent in March. It was 13.61 per cent in February 2015.
"It's a temporary phenomenon. The overall imports normally decrease in April before the national budget," a senior official of a leading private commercial bank (PCB) told the FE on Monday.
Besides, a substantial quantity of essential items, including food grains, were imported in February and March ahead of the holy Ramadan, he said while explaining the falling trend of imports.
Opening of letters of credit (LCs) against imports, generally known as import orders, decreased by 5.56 per cent to US$ 3.30 billion in April 2015, from $3.50 billion in the corresponding period of the previous calendar year.
On the other hand, the settlement of LCs, generally known as actual imports, dropped by 1.22 per cent to $3.0 billion during the period under review, from $3.04 billion in the same period in 2014, according to the central bank statistics.
"The private sector credit growth may rise, as implementation of different development projects, particularly the infrastructural ones, will get pace in the coming months," the banker observed.
Availability of loans from overseas sources at lower interest rates also contributed to the lower growth in private sector credit, according to another private sector banker.
Talking to the FE, a senior official of the Bangladesh Bank (BB) said the private sector credit growth decreased slightly in April, considering local currency loans only.
"Actually credit growth to the private sector is maintaining a rising trend in recent months, considering both local and foreign sources of the loans," the central banker explained.
He also said the private sector credit growth may cross the respective ceiling after June 30, if both local and foreign sources of loans are calculated.
The total outstanding loans with the private sector rose to Tk 5,577.76 billion in April 2015 from Tk 4,924.10 billion in the same month of the previous calendar year, the BB data showed.
The central bank earlier set the ceiling for private sector credit growth at 15.5 per cent for the January-June period of the current fiscal year (FY), 2014-15.
"We're ready to increase the ceiling of private sector credit growth in line with requirement," BB Governor Dr Atiur Rahman told reporters on January 29 while announcing the Monetary Policy Statement (MPS) for the second half (H2) of this fiscal.
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