Abu Ahmed, Professor of Economics , Dhaka University : The interest rate of the banks has to be reduced as their authorities have promised the promised the prime minister to do so. I also support the need of reducing the interest rate, but this is not easy. There are no other alternatives than to reduce interest rates to encourage investment.
Why would the people live on interest on deposits if they have other alternatives like the share market? Now everyone has to work on establishing the stock market. If necessary, they will have to pledge to the premier to help about the stock market issue.
The only way to strengthen the stock market is the enlistment of good companies. Besides, it would have been better if there were any tax benefits in the budget. Interest rates are never reduced by meetings.
Ours economic system is a proactive one. If one benefits more than others, it will reduce their rates more for benefits. Borrowers will go to those who will be able to lend at the least interest rates. This is how interest rate is reduced in such an economic system.
If the Bankers Association of Bangladesh takes interest rate lowering initiatives by holding meeting, it will be like a cartel. We all expect the interest rate to be cut. This will encourage the investors and benefit the share market at the same time. We have to keep in mind that nowhere in the world, there is as high interest rate as ours.
Based on an interview by Ashiq Rahman, translated by Sofian Khan.