The Dhaka Chamber of Commerce and Industry (DCCI) has expressed serious concerns about the continuation of Bangladesh Bank’s contractionary monetary policy, warning that it is causing stagnation in business, investment, and overall industrial activity. As of June 2025, private sector credit growth has declined to only 6.4%, the lowest in 22 years.
DCCI attributes this slowdown to uncertainties in the business environment, law and order instability, limited fuel supply, and notably, the tight monetary policy. The alarming rise in non-performing loans, now at 5.3 trillion BDT (around 27.09% of total outstanding loans), poses a significant threat to financial stability and shakes investor confidence. Despite this, the policy interest rate remains unchanged at 10% aiming to control inflation.
The chamber argues that the persistently high interest rates put extra burden on small, cottage, micro, and medium industries, as well as productive sectors, hampering economic dynamism. The new monetary policy target for private sector credit growth over the next six months is set at a mere 7.2%, down from the previous target of 9.8%, while credit growth target for the public sector has been raised to 20.4%, which could increase financial pressure on the economy and taxpayers and further squeeze credit availability to the private sector.
DCCI has urged Bangladesh Bank to lower interest rates and ease loan conditions to stimulate credit flow into business and investment. They also proposed extending the loan classification timeline by six months to help rehabilitate honest borrowers and reduce immediate non-performing loan risks.
For sustainable economic recovery, DCCI emphasizes the need for structural reforms in the financial sector, increased transparency in loan allocation, and strict liquidity monitoring. It advocates for a more flexible, inclusive, and sector-specific responsive monetary policy to restore private sector confidence, boost investment, and maintain macroeconomic stability in the future.
