Interest rates for NBFIs rise further
The interest rates of loans and deposits in non-bank financial institutions (NBFIs) increased further as the central bank hiked the interest margin by 25 basis points to make money costlier with the aim to curb skyrocketing inflation.
Average inflation rose 9.93 percent in October, far above the central bank's target of 6 percent for the current fiscal year, which ends in June.
The central bank's decision to increase the interest margin in the NBFI sector follows a similar decision taken for commercial banks a few days back.
The previous interest margins were 2.50 percent for deposits and 5.50 percent for lending.
As per the decision, NBFIs now can add a 2.75 percent margin with the reference rate, also known as SMART, for deposits.
Likewise, NBFIs can now add a 5.75 percent margin with the reference rate of 7.43 percent for lending.
As a result, NBFIs' lending rate will be 13.18 percent and deposit rate will be 10.18 percent for this month.
Previously, some NBFIs offered a maximum of 15 percent interest against deposits.
The six-month moving average rate of treasury bills, abbreviated as SMART, was 7.43 percent in November.
The central bank on Sunday raised the repo rate by 50 basis points to step up its fight against persistently high inflation.
The repo rate is the rate at which the Bangladesh Bank lends money to commercial banks and financial institutions.
Now, the policy rate stands at 7.75 percent.
Sunday's increase was the eighth hike in the repo rate in the past 19 months as inflation has kept surging.
At the press briefing on Sunday, Bangladesh Bank Chief Economist Md Habibur Rahman said the central bank hiked the rates to bring down point-to-point inflation to 8 percent by December this year and 6 percent within June next year.