Business Desk :
Deposits in local commercial banks increased by 10.43% in February (year-on-year) this year, thanks to rise in banks’ interest rates.
According to Bangladesh Bank data, bank deposits in the country rose to Tk1,661,649 crore in February, marking an increase from Tk1,504,767 crore in February 2023.
It was Tk1,594,584 crore in June 2023.
Term deposits surged from Tk1,325,000 crore in February 2023 to Tk1,471,000 crore in February 2024. Demand deposits also increased from Tk179,000 crore in February 2023 to Tk190,000 crore in February 2024.
Bankers attributed the continuous increase in deposit rates to attracting many people to keep money in the banks.
Most banks raised their interest rates during this period to attract more deposits, as the banking sector was facing a liquidity shortage. The interest rates ranged from 8% to 11%.
The Bangladesh Bank’s removal of the ceiling on lending and deposit rates allowed the banks to raise deposit rates conveniently.
The central bank discontinued the minimum deposit rate for banks on December 12, 2023, as it had already introduced a market-based lending rate system on the financial market.
The Bangladesh Bank adopted a new interest rate regime in its June 18, 2023 monetary policy statement, removing the previously imposed 9% lending rate ceiling.
Additionally, Bangladesh received a substantial amount of foreign remittances, which also played a vital role in raising deposits in banks, as remittances create new money.
For the period from July to March in FY24, remittance inflow reached $17.07 billion compared with that of $16 billion in the same period in FY23.
Over the past 32 months, the central bank sold approximately $30 billion from its foreign exchange reserves.
The gross foreign exchange reserve in Bangladesh, according to International Monetary Fund guidelines, dropped to $19.5 billion on November 15, 2023 from $23.25 billion on August 31, 2023.
