Lending Rates Behavior in Bangladesh: Some Facts and Determinants

The intention of this study is to analyze lending rate behavior in Bangladesh and also to determine the factors that mostly affect the lending rates. For this purpose, a set of macro and bank specific variables are used to examine whether the lending rates move due to changes in these variables. The Ordinary Least Square method (OLS) is used to determine the lending rates of all banks, state owned banks, private commercial banks, specialized banks and also for foreign banks. The deposits rates, inflation, non-performing loans, repo and reverse repo, both 3 year and 5 year rates are used. The empirical results show that the lending rates impacts vary among the different banks groups.