Business leaders urge governor to slash interest rates to single digit
After the meeting, FBCCI Secretary General Md Alamgir said that the current interest rate in Bangladesh is over 14%, which is not conducive to business growth
Business leaders have urged the Bangladesh Bank to reduce loan interest rates to single digit, describing the current high rates as unfriendly to businesses.
During a meeting with Bangladesh Bank Governor Ahsan H Mansur in the capital today (9 October), they stressed that lower rates in the upcoming monetary policy would particularly benefit small and medium-sized enterprises (SMEs).
A 14-member delegation, including representatives from the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), and the Bangladesh Textile Mills Association (BTMA), met the governor. Deputy governors, along with other relevant officials, were present at the meeting.
Keep updated, follow The Business Standard's Google news channel
After the meeting, FBCCI Secretary General Md Alamgir said the current interest rate in Bangladesh is over 14%, which is not conducive to business growth.
The current interest rate in Bangladesh is over 14%, which is not conducive to business growth. SMEs make a profit of only 10-11%.
He explained that in a fully competitive market, small and medium enterprises make a profit of only 10-11%, and such high interest rates make it difficult to remain competitive in the global market.
He urged the central bank to gradually reduce the interest rate to single digits, in line with controlling inflation, promoting investment, and maintaining Bangladesh's competitiveness in the global market.
"The governor assured us that the policy interest rate would indeed be brought down to single digits in the upcoming monetary policy," Alamgir said.
Alamgir also discussed the impact of external factors such as the Covid-19 pandemic, the Russia-Ukraine war, floods, and political instability on businesses.
He proposed the extension of a committee formed to restructure the businesses and financial systems of affected loan recipients, noting that the committee's term had ended in September, and he had requested a six-month extension.
He also proposed the formation of a separate committee to review loans under Tk50 crore and provide policy assistance. The governor assured that this would not be a problem and that the process would continue, Alamgir said.
Furthermore, the FBCCI secretary general highlighted the banking challenges faced by export-oriented industries, urging the formation of a special committee within Bangladesh Bank to address these issues promptly.
He suggested that the committee should include representatives from the FBCCI, the BGMEA, and other trade organisations related to exports.
"The governor agreed to the proposal and assigned a deputy governor to handle these concerns," said Alamgir, expressing confidence that they would now be able to discuss these issues with the designated official for swift resolution
