Dhaka, Bangladesh (BBN) – The central bank of Bangladesh on Thursday slashed its interest rate on repurchase agreement (repo) and reverse repo by 50 basis points after nearly four years aiming to boost fresh investment particularly in productive sectors, officials said.
The interest rate on repo auction came down to 7.25 per cent from 7.75 per cent while the interest rate on reverse repo was re-fixed at 5.25 per cent from 5.75 per cent.
The revised interest rates on both repo and reverse repo will come into effect from February 1, a central bank circular said Thursday.
The circular was issued hours after announcement of the new monetary policy statement by Bangladesh Bank (BB) Governor Atiur Rahman.
“We’ve issued the circular in the line with our new MPS,” a BB official said, adding that the BB’s latest move to help boosting fresh investment in different sectors particularly in productive one.
The BB’s latest move indicates that the central bank is going back to its policy of expansionary monetary measures as it would encourage credit flow to the private sector, a senior treasury official of commercial bank told BBN in Dhaka. “Bangladesh Taka will be cheaper in the near future.”
Earlier on March 11, 2009 the BB slashed its interest rate on repo and reverse repo aiming to offset the global financial recession through boosting fresh investment.
BBN/SSR/AD-31Jan31- 9:08 pm (BST)
