Bangladesh’s central bank, the Bangladesh Bank (BB), considering the implications of the coronavirus pandemic, has decided to slash the interest rate on loans from the export development fund (EDF) from 2 per cent to 1.75 per cent.
The central bank took this important decision on Wednesday, which would now allow eligible borrowers to take loans from EDF at reduced interest rate.
A circular issued by the BB in this direction underlined that owing to the existing situation in view of the COVID-19, it has been decided to reduce interest rate on EDF loans at 1.75 per cent chargeable to eligible borrowers; for disbursements until 31 March 2021.
The new rate will be effective immediately, maintained the BB circular.
This move by the BB, which on 7 April reduced the interest rate for loans under the EDF to 2 per cent, is expected to help the exporters to effectively deal with the devastating impact of the coronavirus pandemic.
Underlining that it would reduce the cost of opening a back-to-back letter of credit (LC) and also will increase the profit margin, Managing Director of Snowtex SM Khaled told media that the reduced interest rate will help garment makers retain competitiveness even as retailers have reduced prices of apparel items due to the COVID-19 pandemic.