The credit growth in private sector in February 2012 increased for the first time in the current financial year due to high growth of opening of letters of credit for certain products, said Bangladesh Bank officials.  
According to the BB data released on Thursday, the private sector in February borrowed Tk 38,0511.60 crore, which was 19.55 per cent higher than the same month of the last financial year when the borrowing was Tk 31,8281.8 crore.
BB data showed that the private sector credit growth had decreased continuously from July to January of FY 2011-12 compared to that of the same months of the previous fiscal year.
The credit growth in July reached 24.36 per cent, in August 23.19 per cent, September 21.97 per cent, October 21.46 per cent, November  19.33, December 19.39 per cent and January  18.94 per cent.
But the credit growth in February increased from that of the previous January, BB data showed.   
In its latest half-yearly monetary policy for January-June 2012, the central bank stated that it would aim at containing inflationary pressures through discouraging credit flow to public and private sectors.
BB had also taken another contractionary monetary policy for July-December 2011.
Under the new monetary programme, credit growth rate for public and private sectors was envisioned to be limited to 31 per cent and 16 per cent respectively by the end of June 2012 from 62 per cent and 18 per cent at the end of December 2011.
BB data showed that particularly the government sector in February had borrowed Tk 89,669.60 crore, which was 59.92 per cent higher compared to that of February 2011.
On the other hand, the public including government sector credit growth in February stood at 43.32 per cent compared to that of the same month of the previous year.
A BB official told New Age on Thursday that credit growth in private sector fell sharply in the last few months because of contractionary monetary policy taken by central bank.
But the credit growth in private sector in February increased because of a high growth of LC opening for certain products, he said.
He said the LC opening for scrap vessels and pulses in February increased compared to that of the previous month of January.
According to BB data, LCs worth $ 134.49 million and $ 33.66 million were opened for scrap vessels and pulses in February against $ 60.26 million and $ 11.27 million in the previous month.
Moreover, LC opening for chemical products and crude edible oil in February also increased compared to that in January.
Another BB official said that the private sector credit growth might decrease in the coming months as the central bank had not given any money to commercial banks through repurchase agreement since December 22, 2011, virtually forcing the cash-strapped banks to take funds at higher interest rate through the central bank’s special Repo.
The interest rate of Repo, through which BB sells money to banks for short time, is 7.75 per cent while the current interest rate of special Repo is 10.75 per cent, he said.
He said the credit growth in government sector might increase in the near future as the government has taken a plan to increase its borrowing from the banking source.
The government earlier decided that it would borrow a total of Tk 189.57 billion from the banking source, he said.
But the borrowing target recently increased by more than 47 per cent to Tk 279 billion, he added.