Dhaka, May 8 -- Bangladesh Bank has finally discarded the existing reference rate, or SMART, used for determining the lending rates of banks and NBFIs, the central bank said in a circular on Wednesday.

The move comes more than ten months after the BB introduced the SMART (six-month moving average rate of treasuries) formula at the start of this financial year (FY'24).

According to the resolution of the Monetary Policy Committee (MPC) meeting held on the same day, the SMART reference rate was abolished to move towards a market based interest rate.

That means, banks and NBFIs can set interest rates based on market demand and supply as well as the banker-customer relationship, it added.

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