BB cuts lending rate margin by 25 basis points

Bangladesh Bank has cut the lending rate margin by 25 basis points to stabilise loan interest rates as the benchmark interest rate known as SMART has been increasing consistently since introduction.

From now, banks can impose a 3.5 percent margin with SMART (Six months Moving Average Rate of Treasury bill) in case of lending, down from 3.75 percent, according to a central bank notice issued today.

The lending rate margin will be 2.5 percent instead of 2.75 percent in case of loans for pre-shipment export and agriculture, it read.

The central bank is trying to stabilise the growing lending rate by lowering the margin as interest rate on loans rapidly hiked in the recent months due to growing reference rate called SMART.

SMART stood at 9.61 percent in February, which will be applicable in March, Bangladesh Bank's website showed.

The SMART was at 8.68 percent in January.