Interest cap lifted to lure forex deposits

The Bangladesh Bank today withdrew the interest rate ceiling on non-resident foreign currency deposits (NFCDs) as part of its efforts to ease the ongoing pressure in the foreign exchange market.

The central bank had earlier asked banks to set the interest rate in line with the euro currency deposit rates followed by the lenders in the euro zone.

The local banks offered interest rates ranging from 0.25 per cent to 0.80 per cent to the depositors as per the BB instruction.

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From now on, banks are allowed to avoid such ceiling to mobilise deposits from non-resident Bangladeshis, Bangladeshi origin individuals, including those having dual nationality and residing abroad.

The withdrawal of the interest rate ceiling will also be applicable for foreign companies, firms registered or incorporated abroad, and banks and other financial institutions including institutional investors.

In addition, banks can also manage the foreign currency fund from the industrial units, which is fully owned by foreign nationals and entities, located in the export processing and economic zones.