Private sector credit increases 8.42 pc in Aug

Staff Correspondent: Credit flow to the private sector has been growing gradually as July and August figures show mainly on the back of demand for working capital.
Private sector credit rose to 8.42 percent in August from 8.38 percent in July, according to the central bank.
July figure had also improved by .40 percentage points from June although it was still 6.8 percentage points lower than the Bangladesh Bank target.
The central bank in its monetary policy for this fiscal year had set its private sector credit flow target at 14.8 percent which is unchanged from the previous fiscal year’s target. However, the target could not be met last time.
The ongoing Covid-19 pandemic along with deepening uncertainties had pushed down the credit growth in the past couple of months, according to the bankers.
However, private credit flow recovered as external trade has increased this fiscal year. Accordingly, dollar has gained against taka with the increase in import of capital machinery and payment for Covid-19 vaccines.
A central bank senior official hoped the demand for credit would increase in the coming months following the reopening of the country’s overall economic activities gradually.
“We expect that the private-sector credit growth will cross double-digit level by the end of this calendar year if the improving trend in the Covid situation continues,” the central banker predicted. Meanwhile, outstanding loans with the private sector rose to Tk 11,870.11 billion in July from Tk 10,952.02 billion a year ago. It was Tk 11,888.55 billion in June 2021.