Bangladesh Bank yesterday raised the interest rate for loans from its export development fund (EDF) by 1 percentage point to make borrowing costlier and save foreign currencies from falling, a move that comes in less than four months since it increased the rate for loans under this special fund.
From now on, exporters will have to pay 4 per cent interest annually for foreign currency loans under the special fund from banks, up from 3 per cent earlier.
Accordingly, the central bank hiked its interest rate on EDF loans to banks to 2.5 per cent from 1.5 per cent.
The development coincides with the time when foreign exchange reserves are falling gradually as imports surpass total inflows into Bangladesh because of falling exports and remittances. The local currency taka has lost its value to a large extent against the US dollar since January this year.
