The BB sets an interest rate ceiling on foreign currency deposits of non-residents
The central bank today set the cap on the annual interest rate on foreign currency deposits of non-residents to mobilize funds from Bangladeshis living abroad and people of Bangladeshi origin.
In a notice, the Bangladesh Bank said the interest rate ceiling would be the benchmark benchmark rate plus 2.25% for deposits with terms of one to three years.
For all the latest news, follow the Daily Star’s Google News channel.
A reference reference rate is an interest rate that determines other interest rates.
The cap will be the benchmark benchmark rate plus 3.25% for deposits with terms ranging from three to five years, the BB said.
On July 17, the BB lifted the cap on interest rates on foreign currency deposits from non-residents to increase the supply of US dollars and stop lingering volatility in the foreign exchange market.
Until then, banks in Bangladesh set the interest rate based on euro deposit rates tracked by eurozone lenders and offered interest rates ranging from 0.25% to 0.80% to depositors. .
But savers do not feel encouraged to keep their funds in banks due to falling interest rates.
“The interest rate cap aims to attract foreign currency deposits from NRBs. It will allow savers to negotiate a better rate within the cap,” a central banker said.