Credit growth in Bangladesh pvt sector rises 50 pct

DHAKA (Reuters) - Credit growth in Bangladesh's private sector, rose 50 percent to 115.51 billion taka ($1.68 billion) during the first five months of the current fiscal year, driven by growing demand from import and agriculture businesses.

Credit in the private sector between July and November of previous fiscal year to end of June 2007 was 77 billion taka.

"It is a positive sign, as they (private sector) are the main engine for the growth of the economy," said Murshid Kuli khan, a deputy governor of the central bank.

"The upward trend will continue further as the central bank follows a relaxed monetary policy to help economy grow," Murshid told Reuters.

The central bank said in January it would pursue an expansionary monetary policy to ease credit facilities and would also keep a lid on inflation.

"We have asked all the banks to gear up loan allocations for agriculture, small and medium enterprises and rural infrastructure so that economy can run in its right truck to recover the losses after a series of natural calamities and also to improve the domestic supply situation," he said.

The army-backed interim government is ramping up production of main staple rice after floods and a cyclone of last year left it with a shortfall of up to 2 million tonnes.

Bangladesh is under a state of emergency since January 2007, when the interim authority took power following months of deadly political violence.

It banned all political activity, protests and disruptions -- and it has vowed to hold parliamentary elections late this year after completing a drive against widespread corruption.

($1 = 68.58 taka)