The banks’ loan interest rate for March has increased to 13.11 per cent due to the increased Six-Month Moving Average Rate of Treasury Bill (SMART), even though the Bangladesh Bank slashed the corridor margin interest by 25 basis points to 3.50 per cent from 3.75 per cent.
On Thursday, 29th February, the data was released by the Bangladesh Bank.
Insiders believe that the Government paid higher interest rates for its borrowing through bonds and Treasury bills. Consequently, the loan rate of the banks went to 13.11 per cent from 12.43 per cent in the preceding month.
Double-digit interest rates and increases in energy prices will create a precarious situation for the garment industry to overcome its impending hurdles, according to exporters in the industry.
Increasing lending rates also has an impact on the manufacturing sector. It costs a lot to make value-added items since specialised machinery, yarn, and fibre are required. Bank loans are important in this situation, and manufacturers noted that if the lending rate is more than 13 per cent, the profit margin will be lower than 6 per cent, they added.
Additionally, manufacturers pleaded with the Government to assume a crucial role by offering tax breaks, incentives, and other benefits.