The Bangladesh Bank (BB) has cut interest rates by 1.0 percent to 9.10 percent for pre-shipment loans in the export sector.
The Banking Regulations and Policy Department of the central bank issued a circular on Thursday reducing the interest rate considering the global challenges for the export sector due to the Russia-Ukraine war.
The circular stated that determining the interest rate on pre-shipment export credit, interest rate shall be determined by adding a maximum margin of 2 percent to the `SMART` system.
The BB implemented the new structure of interest calculation on July 1. In this system, banks can calculate interest on loans by adding a maximum of 3 percent with `SMART` (SMART-six-month moving average rate of 182-day treasury bills). However, it has been reduced to 2 percent for pre-shipment export credit.
According to the BB, the average rate of 182-day treasury bills is 7.10 percent. If the banks add 2 percent of the pre-shipment export loan to this, the maximum loan interest rate will be 9.10 percent.
The central bank on Thursday sent this instruction to the banks and asked for immediate implementation.
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