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Private sector credit increased by 8.61 per cent in October

Published : Thursday, 24 December, 2020 at 12:00 AM  Count : 370

Private sector credit grew by 8.61 percent in October this year compared to the corresponding period under last year. Bangladesh Bank (BB) latest update shows private sector credit disbursement in October of this year was Tk11143 billion which is Tk883.64 billion or 8.61 per cent higher than the amount of Tk10259.58 billion in October last year.
The statistics however shows though it increased over last year, the amount was lower from October       of 2018. The data shows last year's October figure was Tk936.10 billion which is higher by 10 per cent.
Talking with The Daily Observer Anis A Khan, a retired banker said due to the pandemic the           growth slightly fell but it did not happen that was feared.
He said despite over 8.6 per cent growth few banks do have excess liquidity. On the other hand after expiry of the government set time frame of not making borrowers as defaulters till December, the real  scenario could be visible soon in the overall banking sector, he added.
The BB in July announced an expansionary monetary policy for 2020-21 mainly  taking aims to  increase   money supply in the economy to accelerate economic recovery from the devastating impact of Coronavirus related setback.
To achieve the goal, the central bank had reduced the repurchase rate by 50 basis points to 4.75 percent, lowering borrowing costs for a third time this year to boost money supply to banks and to private sector from the banking windows.
The central bank also reduced the reverse repo rate by 75 basis points to 4 percent, according    to the monetary policy statement published on the central bank's website on Wednesday
The statement singled out several risk factors to attain the monetary policy objectives mainly arising out of the ongoing COVID-19 pandemic, seasonal floods, and international sluggish economic and volatile price situations.
The new policy statement set private sector credit target to grow at 14.8 per cent which is slightly higher than 14.6 per cent for last FY 20. The actual growth was however much lower last year at 8.6 per cent far below than target.
On the other hand the public sector credit growth was set at 44.4 per cent for the entire FY21 which was 53.3 per cent in real term last year and much higher than target.











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