The Bangladesh Bank (BB) has reduced the lending rate margin by 0.25% to stabilize loan interest rates. This comes as the benchmark interest rate, known as SMART, has been steadily rising since its introduction.

Previously, banks could add a 3.75% margin to the SMART rate when setting loan interest rates. However, this has now been lowered to 3.5%. For pre-shipment export and agricultural loans, the margin has been reduced from 2.75% to 2.5%.

The central bank is aiming to counter the rising SMART rate, which reached 9.61% in February and is expected to remain applicable in March.

This increase has led to a rapid rise in loan interest rates, prompting the BB to intervene by adjusting the lending rate margin.