Finance Minister AHM Mustafa Kamal has expected that the bank interest rate for manufacturing sector will come down to single digit from January 1 for accelerating the country’s industrialisation and employment generation.
“The Bangladesh Bank (BB) will give necessary guideline through issuing a circular in this regard. The single digit interest rate would speed up the country’s industrialisation,” he said.
The minister came up with the statement at a press briefing after the meetings of Cabinet Committee on Economic Affairs (CCEA) and Cabinet Committee on Public Purchase (CCPP) at the Cabinet Division in the city on Wednesday.
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 industrialisation. Without industrialisation, 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 361.67 billion till October of the current fiscal 2019-20 and out of the total borrowing amount during the first four-month, around Taka 306.00 billion came from banks and Taka 55.00 billion from savings instruments.
But, he said, the government borrowed Taka 269.00 billion during the corresponding period of the fiscal 2018-19 and out of the total amount, Taka 52.00 billion came from banks and Taka 216.62 billion from savings instruments.
Abdur Rouf informed that the average interest rate for the savings instruments borrowing is around 11 per cent, which is around 7 per cent 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.