Bangladesh Bank has removed the interest rate cap on Resident Foreign Currency Deposit (RFCD) accounts, providing banks with the freedom to set their own interest rates for these accounts.
This change means that banks are no longer required to pay an additional 1.5 percent over the Secured Overnight Financing Rate (SOFR), which is currently 5.3 percent.
Previously, this cap led to a 6.8 percent interest rate on RFCD accounts.
RFCD accounts are designed for Bangladeshi residents who bring in foreign currency from international travel. Deposits can include any foreign currency declared to customs or amounts up to $5,000 brought in without declaration.
However, funds from local exports or business commissions cannot be credited to these accounts. This policy change allows banks more flexibility in attracting foreign currency deposits and potentially makes RFCD accounts more competitive.