Onion importers will get loans at an interest rate not more than 9 percent. The Bangladesh Bank fixed the rate on Wednesday to ensure sufficient supply and tolerable price of onion.
The Bangladesh Bank circular, which was sent to the chief executives of the commercial banks, said local market of onion has recently turned volatile after this cooking ingredient witnessed a price hike in the international market.
There has been a shortage of the everyday essential at the consumer level, it said.
The central bank also directed the commercial banks to relax the loan-margin ratio to make the import cheaper.
The interest rate takes immediate effect and will continue till December 31 this year.
The price of onion has shot up to over Tk100 followed by an onion export ban in neighbouring India.
The Indian media reported on Sunday that India prohibited onion export till further orders. The decision came after the country imposed an $850 per tonne minimum export price on onions on September 13 to curb export.
Prices of onion have increased in India after floods hit productions in Maharashtra and Karnataka recently.
In Delhi and Kolkata, retail prices of onions have been Rs60 per kilogram, which were between Rs20 and Rs30 a month ago, according to the local media.
Bangladesh produces 1.7 million to 1.9 million tonnes of onion annually and imports 700,000 tonnes to 1.1 million tonnes to meet the domestic demand. The importers bring onion mostly from India as the transport cost is low due to the proximity.