Governor Ahsan H. Mansur declared during a news conference that the Bangladesh Bank will raise the policy interest rate in an attempt to combat growing inflation.
The repo rate was moved from 9 per cent to 9.50 per cent by an upward adjustment of 50 basis points. The cost of borrowing money for banks from the central bank will increase as a result of this adjustment. The policy rate was raised by the central bank by 50 basis points to 9 per cent earlier on August 25
If the repo rate is increased, the cost of borrowing money from the central bank will increase. Consequently, the interest rate on the money borrowed from the central bank will be greater. Interest rates on bank accounts and loans will also increase. To further enhance banks’ ability to manage liquidity, the Standing Lending Facility (SLF) maximum limit of the policy interest rate corridor has been increased by 50 basis points, from the existing 10.50 per cent to 11 per cent.
Similarly, the policy interest rate corridor’s Standing Deposit Facility (SDF) lower limit has risen from 7.50 per cent to 8 per cent, a 50 basis point increase. The scheduled implementation date is Wednesday.
Ahsan H. Mansur, governor of the Bangladesh Bank, declared, “By March or April, inflation should be in a good place.” It’s hard to predict how well it will turn out. However, we will tighten the guidelines to reduce inflation.
“Additionally, remittances are rising. We hope that the current stability of the currency rate will continue.” He continued, “Inflation will definitely decline if this can be maintained.”
