Bangladesh Bank has ordered all the banks in the country to keep the interest rates to a maximum of 9% on the loans used to import essential commodities, including onions.
The central bank issued a circular in this regard on Thursday.
The order will remain effective till the end of this year.
Onion prices are on an upward trend in the country after this essential commodity’s price got hiked in international markets, the circular said.
Considering this price hike, Bangladesh Bank instructed all the banks to keep the margins at a minimum level while opening letters of credits (LCs) for importing onions.
The interest rate ceiling is also applicable for importing edible oil, grams, lentils, spices, debt, fruits and sugar.
India bans onion export again
On Monday, the Indian government banned exports of all types of onions to Bangladesh, citing a shortage in supply in India itself due to heavy rainfall and floods.
The ban comes close to a year after India announced its move of not exporting onions in 2019.
India banned onion exports on September 29 last year, a move that led to a skyrocketing of prices of the key cooking ingredient to a historic high of as much as Tk250 per kilogram in Bangladesh.
On Tuesday, the price of onion increased rapidly in Bangladesh after the export ban on Monday.
Prices shot up by Tk30-50 per kg in a day, three times higher than in the last two weeks.
In retail markets, prices of local onion increased to Tk120 per kg from Tk80-85. Imported onion was selling for Tk90 per kg, which was earlier around Tk 50-55 per kg.
In the wholesale market, local onion was being sold for Tk90-100 per kg, and imported onion for Tk 60-65 per kg.
Traders expected that the prices would follow last year’s trend.
