Dhaka, Feb. 1 -- Banks can now charge a maximum interest rate of Secured Overnight Financing Rate (SOFR) plus 4 percent on short-term trade financing in foreign currency after Bangladesh Bank raised the rate by 50 basis points.

This will lead to higher expenses for businesses seeking short-term foreign currency loans.

The central bank sent a circular to the chief executive officers of all banks on Thursday, stating that the annual interest rate has been set at four percent, considering global market conditions and interest rates.

Bangladesh Bank increased the rate from 3.5 percent in line with international benchmarks like Euro Interbank Offered Rate or EURIBOR and Sterling Overnight Index Average or SONIA.

In September 2022, the cent...