Private sector credit growth exceeded the target, set by the central bank earlier, in June despite a declining trend in recent months, officials said.
The growth in credit flow to private sector came down to 16.95 per cent in June 2018 on a year-on-year basis from 17.60 per cent a month ago.
It was 15.66 per cent in June 2017, according to the Bangladesh Bank (BB) statistics.
The central bank in its outgoing monetary policy had set a target for the private sector credit growth at 16.80 per cent at the end of June, 2018.
The BB is now formulating the next monetary policy statement (MPS) for the first half (H1) of the current fiscal year (FY) 2018-19 aiming to achieve a maximum economic growth with curbing inflation, the officials added.
"The private sector credit growth will be fixed for H1 of the FY 19, considering achievement of the growth with containing the inflationary pressure on the economy," a BB senior official told the FE.
The next MPS will be released by the end of this month, the central banker added.
Senior bankers, however, said the private sector credit growth normally increases slightly in June each year because of charging quarterly interest on loans and advances.
"The private sector credit growth is marginally higher than the BB's target by the end of June as booking interest on loans," M A Halim Chowdhury, managing director (MD) and chief executive officer (CEO) of Pubali Bank Ltd told the FE.
Higher import payments particularly for trade financing have contributed to exceeding the private credit growth target, the senior banker explained.
Bangladesh's overall imports grew by nearly 17 per cent in the first 11 months of the FY 18 mainly due to higher import of food grains and fuel oils.
The settlement of letters of credit (LCs), in terms of value, rose to US$47.79 billion during the July-May period in the FY 18 from nearly $41 billion during the same period in the FY 17, the BB data showed.
Talking to the FE, Syed Mahbubur Rahman, chairman of the Association of Bankers, Bangladesh (ABB), said the ongoing trend in private sector credit growth may continue this month.
The total outstanding loans with the private sector rose to Tk 9076.22 billion in June last from Tk 8924.03 billion in May 2018. It was Tk 7760.56 billion in June 2017.
