Bangladesh Bank Rolls Out Tk60,000 Crore Stimulus to Restart Factories and Create 2.5 Million Jobs

The central bank said idle deposits in banks with an Advance‑Deposit Ratio above 70% will be channeled into a refinancing fund, with the government subsidizing part of the interest cost. This aims to unlock credit for sectors hit by power shortages and weak demand.

As of the latest close, the S&P 500 (^GSPC) stood at 5,320 points, up 0.2%, while Bangladesh’s DSEX index (^DSE) rose 0.3% to 6,250, giving the country’s listed banks a combined market cap of roughly $12 billion. These benchmarks show that global risk appetite remains modest, yet local equity markets are reacting positively to the stimulus news.

Under the plan, Tk41,000 crore will come from a refinancing window where banks deposit excess liquidity at 10% interest; the government covers 7% of that cost, leaving Bangladesh Bank to absorb the remaining 3%. Banks then lend to borrowers at capped rates of 6% for most firms, 7% for large industries, and 4% for start‑ups. The central bank draws the remaining Tk19,000 crore from its own reserves for targeted schemes such as pre‑shipment credit, cottage enterprises, and green products.

The stimulus could create nearly 2.5 million jobs by reopening factories that have been idle due to working‑capital shortages, according to the bank’s estimate. By lowering borrowing costs from prevailing rates of 15‑16% for SMEs to a maximum of 6%, the program seeks to revive private‑sector credit growth, which has fallen to a historic low of 4.7%.

Investors should watch for the central bank’s upcoming circular that will formalize monitoring rules, including escrow accounts for each factory and possible third‑party oversight, to ensure funds are used as intended.