Dhaka, Bangladesh (BBN) - The Bangladesh Bank (BB) has raised the policy rate, also known as the repo rate, by 50 basis points to 9.50 per cent in an effort to combat the skyrocketing inflation.
The new rate will come into effect from September 25, according to a notification, issued by the Bangladesh Bank (BB) on Tuesday.
The policy rate hike means banks under liquidity crunch will now have to pay more interest for loans taken from the central bank.
“It would also lead to an increase in interest rates at the customer level. With rising interest rates, spending is expected to decline, which would ultimately reduce inflation,” a senior banker explained.
Meanwhile, Bangladesh’s inflation as measured by consumers’ price index eased to 10.49 per cent in the month of August on the point-to-point basis mainly due to lower price of food items.
The inflation dropped 117 basis points to 10.49 per cent in August this calendar year from 11.66 per cent a month before. It was 9.72 per cent in June, 2024, according to the Bangladesh Bureau of Statistics (BBS)’s latest data.
BBN/SSR/AD