The governor of Bangladesh Bank (BB), the country’s central bank, has reportedly stated that the bank will increase interest rates in the coming days from 8.5 per cent to 9 per cent in an effort to curb the country’s skyrocketing inflation.
The action was taken in response to weeks of political upheaval in the nation, which caused a rapid increase in inflation that reached 11.66 per cent in July. At the same time, the government was still grappling with declining reserves and declining exports from the major garments industry.
Just one week ago, Ahsan H. Mansur, the newly appointed governor of Bangladesh Bank, announced that he would hike interest rates even higher, to at least 10 per cent, in the upcoming months.
As he has already stated, lowering interest rates may take longer even if inflation should decline significantly over the course of the next year.
The Nobel Prize-winning economist Muhammad Yunus led the interim administration of Bangladesh, which appointed Mansur after Prime Minister Sheikh Hasina was forced to flee to India last month due to a violent rebellion against her.
Mansur added that he was in discussions to “augment” the bailout sum by an extra US $ 3 billion with the International Monetary Fund. In January 2023, the IMF authorised a US $ 4.7 billion credit agreement with the nation.
According to him, the nation is requesting an extra US $ 1.5 billion from the World Bank, as well as US $ 1 billion from the Japan International Cooperation Agency and the Asian Development Bank.