Dhaka, Bangladesh (BBN)-Bangladesh’s private sector credit growth decreased slightly in September mainly due to lower payment obligations, officials said.
The growth in credit flow to private sector came down to 15.34 per cent in September 2016 on a year-on-year basis from 16.21 per cent a month ago, according to the central bank’s latest statistics. It was 15.97 per cent in July 2016.
“We expect that the credit growth may pick up in the month of October following upward trend in imports,” a senior official of the Bangladesh Bank (BB), the country’s central bank, told BBN in Dhaka.
The central bank of Bangladesh had projected that private sector credit would grow at 16.60 per cent in December 2016 and 16.50 per cent in June 2017 respectively.
Bangladesh’s overall imports bounced back in October due to rise in capital machinery imports along with back-to-back imports for RMG sector, he added.
The actual import in terms of settlement of letters of credit (LCs) stood at US$ 1.40 billion in the first two weeks of October. The value of opening of LCs, generally known as import orders, was $ 1.53 billion.
On the other hand, Bangladesh’s overall imports dropped significantly in September 2016 compared to the previous month mainly due to lower back-to-back imports for RMG sector along with capital machinery.
The settlement of LCs fell by more than 13 per cent to $ 2.99 billion in September 2016 from $ 3.43 billion in August.
However, the opening of LCs also decreased by 7.36 per cent to $ 3.53 billion in September from $ 3.81 billion in the previous month.
Back-to-back imports for RMG products, including fabrics and accessories, came down to $ 550 million in September last from $ 701.12 million a month ago while capital machinery imports amounted to $ 206.77 million from $ 246.78 million.
“Actually, the volume of private sector credit increased with decreasing trend,” another BB official explained.
The total outstanding loans with the private sector rose to BDT 6801.37 billion in September 2016 from BDT 5896.86 billion during the same of the last calendar year. It was BDT 6719.35 billion in August 2016.