from the banking system were unusually high in 2007-08 compared to recent
trends as it grew more than 30 percent, despite a substantial 32 percent
decline in credit to other public sector.
spending on food, fuel and fertilizer might have stimulated the borrowings from
the banking system," a senior Bangladesh Bank official told UNB yesterday.
According to the
latest figures the central bank reviewed late last week, net credit to the
government sector increased to about Tk 47,000 crore at the end of June this
year from Tk 36,000 crore at the end of June last year.
Credit to other
public sector decreased by 32 percent to Tk 11,840 crore in June this year from
Tk 17,455 crore in the previous June.
The BB official said
that the borrowing of public sector from the banks decreased significantly due
to the budgetary provision of Tk 7,523 crore against the liability of
Bangladesh Petroleum Corporation (BPC), the major borrower.
The latest figure,
however, show that private sector credit increased 25 percent during the last
fiscal year as compared to a 15 percent growth in 2006-07.
Total domestic credit
registered a faster growth at 21 percent in 2007-08, compared with about 15
percent in the previous fiscal due to a significantly slow growth in government
sector supported by the budgetary provision.
growth in total domestic credit, including private sector credit, has been more
or less satisfactory in the context of GDP growth projection at 6.2 percent and
inflation," said the Bangladesh Bank review.
It said the consumer
price inflation on 12-month average was 9.94 percent at the end of June this
year (point-to-point 10.04 percent) as compared to 7.2 percent (point-to-point
9.2 percent) at the end of June last year.
increased slightly by 17.6 percent in the last fiscal year from 17 percent
growth of the previous fiscal year.
The intensity of
classified loans of the total outstanding credits by commercial banks dropped
marginally to 13 percent at the end of June this year from about 14 percent at
the end of June last year.
disbursement stood at Tk 8,581 crore during the last fiscal year as compared to
target of Tk 8,309
Bangladesh Bank has
set the credit target at Tk 9,379 crore for the current fiscal year to
accelerate the rehabilitation of Sidr-affected agriculture sector and boosting
During the last
fiscal year, investment in national savings certificates declined drastically
to Tk 2,518 crore from Tk 4,174 crore of the previous fiscal year.
The central bank
observed a fluctuation in the inter-bank call money market recently as the
weighted average rate stood at 9.41 percent as on August 19 this year, which
was 6.9 percent on the same day last year. At the
end of June this
year, the rate was 4.78 percent.
It said the foreign
exchange market has been stable during the last two years and the US dollar was
trading at an average of Tk 68.52 as on August 19. It was traded at Tk 68.52 at
the end of June this year and Tk 68.53 at the end of June last year.
In 2007-08, wage
earners' remittance rose by 32 percent and exports increased by about 16
percent to help the foreign exchange reserve grow significantly, said the
The forex reserve
stood at about US$ 6.0 billion on August 19 this year, as against US$ 5.1
billion on the same day last year.