Surging inflation: Savers in a tight spot
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Loading... - Imane Bouzid
- 13 Oct 2022
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Savers are now facing losses on their deposits with banks due to surging inflation, with many solely dependent on interest earnings finding themselves in a tight corner.
Inflation in Bangladesh surged to a 10-year high of 9.52 percent in August. It, however, fell to 9.10 percent in September, shows data from Bangladesh Bureau of Statistics.
But the weighted average rate of deposits -- which is calculated based on the interest rate of all types of deposits offered by banks -- stood at 4.07 percent in August. This means the real interest rate was negative -- 5.45 percent -- as inflation was 9.52 percent that month.
The real interest rate for depositors is determined by excluding the inflation rate from the interest rate they receive from banks.
Bangladesh Bank publishes the weighted average rate of deposits every month. The data for September is yet to be unveiled.
Talking to this newspaper, a number of bankers said depositors have already turned away from banks due to high inflation, and many are forced to chip away at savings to cope with the rising cost of living. Read More...
