Bank lending rates surpass 13% despite margin reduction

The bank lending rate has exceeded 13% despite a 25-basis-point reduction in the margin for banks.

The central bank today (29 February) reduced banks' interest rate corridor margin to 3.50% from the previous 3.75%. 

The increase in borrowing costs has been attributed to the rise in the benchmark rate, the six-month moving average interest rate (Smart) of the 182-day treasury bill, which climbed to 9.61% for March, up from 8.63% in February, data from the Bangladesh Bank shows

The rate was 8.14% in January.

The central bank has raised the policy rates – currently at 8% – in response to inflationary pressures exceeding 9% since March of the previous year.