Reducing Interest Rate Spreads, Bangladesh
Consultants
Start Date:
June 2004
End Date:
July 2005
Country:
Bangladesh
Client:
First
Funder:
World Bank
Project Information
The OPM team worked on this project with specialists from the research Department of the Bangladesh Central Bank. The purpose was to define a framework of analysis that could help the authorities to better understand the reasons for the high levels of interest rate spreads in the Bangladesh economy. The performance of individual banks in the country were analysed against this framework to try to establish explanations for the different components of spreads in the different sectors of the banking community. The work further developed and built on earlier work on some particular aspects of the problem as carried out by the IMF. Initial policy ideas emanating from the analysis were presented to the Governor of the Bank and other specialists with a view to defining a programme of action to help reduce spreads in the medium term future.