Muhith says savings certificates interest rate will be reviewed in July

The government will review interest rates on savings certificates next month, Finance Minister AMA Muhith has said.

He told a post-budget news conference on Friday that he failed to shed any light on the issue in the budget for 2018-19 fiscal year because he could not have a meeting he had planned on it.

The interest rates of savings certificates were cut for the last time in 2015 by an average 2 percent to rein in sales.

Muhith had been saying he would cut the rates further as the government borrowing from the savings certificates is rising along with the sales.

The government borrowing from the saving tools exceeded its target by 10 percent to Tk 538.32 billion in the first eight months of the current fiscal year.

Muhith had also wanted to reduce the rates in the budget for the current financial year, but had backed off following criticisms. 

He later said he will review the rates after the budget for the upcoming fiscal year is passed.

A volatile capital market and fall in bank interests have encouraged people to invest in the savings certificates.

Even the recent increase in interest rates at several banks has not slowed down the sales of these certificates.