BB ties deposit rate to inflation In Sunday’s notice, the central bank set a new cap and instructed all banks to immediately implement the provisions for personal deposits and pension funds.
The government has set a goal of maintaining an average inflation rate of 5.3% from 2021 to 2010. Therefore, the interest rate on deposits cannot fall below that mark.
BB ties deposit rate to inflation The central bank referred to a “gradual decline” in deposit rates in the banking sector, saying that interest rates below inflation reduced the purchasing power of depositors.
Low interest rates discourage public savings and instead lead to investment in risky and unproductive sectors, as many people rely on interest on deposits.
According to the Bangladesh Bureau of Statistics (BBS), inflation was 64.64% in June 2021, while average inflation for the fiscal year was 5.56%.
Meanwhile, according to data released by Bangladesh Bank, the average interest rate on deposits in June was 1.1.