Private sector credit rises to 8.42% in August
The July figure also improved by o.40 percentage points from June although it was still 6.8 percentage points lower than the Bangladesh Bank target
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% in August from 8.38% in July, according to the central bank.
The July figure also improved by o.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%, which is unchanged from the previous fiscal year's target. However, the target could not be met last time.
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The ongoing Covid-19 pandemic along with deepening uncertainties had pushed down the credit growth in the past couple of months, according to bankers.
However, private credit flow recovered as external trade 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 the 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 Tk11,943.91 billion in August from Tk11,016.57 billion a year ago.
The inflow of remittance from expatriate Bangladeshis, which maintained an upward trend throughout the last fiscal year even amid the Covid-19 pandemic, dropped by 19% year-on-year in the first two months of the current fiscal year.
The country received $3.68 billion in remittance in the July-August period of this year, down from $4.56 billion in the same period of last year, according to the Bangladesh Bank.
In August this year, remittance growth fell by around 8% to $1.81 billion, over the same month in 2020.
