The Financial Express

Business leaders oppose withdrawal of interest cap for sake of investment

| Updated: December 05, 2022 10:33:01

Business leaders oppose withdrawal of interest cap for sake of investment

The country's business leaders have urged against lifting the cap on interest rate arguing that it will affect investment.

They also agreed with the Bangladesh Bank governor who insists that it is not the right time to lift the limit.

Speaking at a conference on Thursday, BB Governor Abdur Rouf Talukder said they are waiting for a good time to withdraw the interest cap.

Md Jasim Uddin, president of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) opposed any increase in the rate.

"If the interest rate suddenly increases, the investors will plunge into trouble. The manufacturing sector investors need to sell their products in a competitive global market,” he said on Friday.

He told UNB that the interest rate is still high in Bangladesh compared with many other competitive countries, which will have to be taken into consideration before raising the interest rate.

Executive president of the Bangladesh Knitwear Manufacturers Association (BKMEA) Mohammad Hatem said entrepreneurs are suffering losses due to the gas crisis. If this continues, increasing interest rate will not be investment friendly.

He said Bangladesh has to decide whether it wants to bring in investment or not. Higher interest rate will create uncertainty in many sectors, already suffering from the pandemic and the Russia-Ukraine war.

The issue of the interest cap came up Thursday in the opening session of a three-day annual development conference organised by the Bangladesh Institute of Development Studies (BIDS) at a city hotel.

Speaking at the event the BB governor informed that the central bank has already relaxed the interest rate on consumer loans.

Regarding the foreign currency exchange rate, Rouf said the BB will allow the market force to determine it.

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