Finance Minister AHM Mustafa Kamal on Wednesday expected that the bank interest rate for manufacturing sector will come down to single digit from January 1, 2020 for accelerating the country’s industrialization and employment generation, reports BSS.
“Through issuing a circular, Bangladesh Bank (BB) will give necessary guideline in this regard. The single digit interest rate will speed up the country’s industrialization,” he told journalists after the meetings of Cabinet Committee on Economic Affairs (CCEA) and Cabinet Committee on Public Purchase (CCPP) at the Cabinet Division in the city.
The finance minister said the central bank formed a committee for giving recommendation and the committee has already submitted a set of suggestions to the central bank. Through the suggestions, he said, BB has made a guideline and the bank will issued a circular soon in this regard. “Single digit interest rate is essential for speeding up our industrialization. Without industrialization, we cannot generate employment for the huge number of educated youth,” he added.
Kamal said though earlier, most of the borrowing money of the government came from savings instruments, but now the government prefers to borrow money from banks as it is the best sources for borrowing. “The two main sources for government borrowing are savings instrument and bank, but the savings instruments are the weak tools for government borrowing,” he added.
Speaking on the occasion, Finance Secretary Abdur Rouf Talukder said the government borrowed around Taka 36,167 crore till October of the current fiscal 2019-20 and out of the total borrowing amount during the first four-month, around Taka 30,600 crore came from banks and Taka 5,500 crore from savings instruments.
But, he said, the government borrowed Taka 26,900 crore during the corresponding period of the fiscal 2018-19 and out of the total amount, Taka 5,200 crore came from banks and Taka 21,662 crore from savings instruments. Abdur Rouf informed that the average interest rate for the savings instruments borrowing is around 11 percent which is around 7 percent for the bank. He said the government is going to collect Value Added Tax (VAT) through automation and so the collection will increase from January.