In February 2016, the credit growth in private sector of Bangladesh increased at 15.11% by crossing the 14.80% credit ceiling set by Bangladesh Bank for ‘January to June’ monetary policy.
Bangladesh Bank’s data shows that the credit to private sector was Tk.6,27,960 crore in February 2016. It was Tk5,45,534 crore in same period of the previous year. Bangladesh had seen the highest credit growth in 2012; that was 16.6%. But from then, the rate was always less than 15% due to sluggish investment atmosphere. In October, 2015, the rate of credit growth started going up at 13% and in December of the same year, the credit growth reached at 14.19%. Following this upward trend, credit growth in private sector reached 14.80%.
Bangladesh Bank was compelled to reduce credit ceiling for two monetary policies due to low credit growth. The domestic credit growth was 11% in February but central bank had set 15.50% as target for June. However, domestic credit growth has been rising and it may pressure on controlling the inflammation. On the other hand, the credit growth in public sector remains negative at 1.85% in February for having enough money in savings instruments from which government is collecting its funds. In February, the lending rate was 10.91% but it was 12.23 in the same period of the previous year.
Interest rate on deposits went down at 6.1% from 7.19% of same period of previous year. The sharp fall in deposit rates is responsible for negative trend in public credit sector as well as it also turned depositors to savings instruments.
Bangladesh Bank’s data shows that the credit to private sector was Tk.6,27,960 crore in February 2016. It was Tk5,45,534 crore in same period of the previous year. Bangladesh had seen the highest credit growth in 2012; that was 16.6%. But from then, the rate was always less than 15% due to sluggish investment atmosphere. In October, 2015, the rate of credit growth started going up at 13% and in December of the same year, the credit growth reached at 14.19%. Following this upward trend, credit growth in private sector reached 14.80%.
Bangladesh Bank was compelled to reduce credit ceiling for two monetary policies due to low credit growth. The domestic credit growth was 11% in February but central bank had set 15.50% as target for June. However, domestic credit growth has been rising and it may pressure on controlling the inflammation. On the other hand, the credit growth in public sector remains negative at 1.85% in February for having enough money in savings instruments from which government is collecting its funds. In February, the lending rate was 10.91% but it was 12.23 in the same period of the previous year.
Interest rate on deposits went down at 6.1% from 7.19% of same period of previous year. The sharp fall in deposit rates is responsible for negative trend in public credit sector as well as it also turned depositors to savings instruments.
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