The Bangladesh Bank (BB), which recently unveiled its new monetary policy for the second half (H2) of the current fiscal, raised the policy rate by 25 basis points to 6 per cent to rein in inflation by making money more expensive for banks. The central bank would pursue a cautiously accommodative stance to contain inflationary and exchange rate pressures.
It raised the reverse repo rate as well by 25 basis points to 4.25 per cent.
Private sector credit growth was kept unchanged to 14.1 per cent under the new policy, while the public credit growth ceiling was raised to 37.7 per cent for June from the previous ceiling of 36 per cent.
This is for the fourth straight time that the bank increased interest rate as inflation remains high after surging to 9.5 per cent in September. The inflation target has been reset at 7.5 per cent for the current fiscal from the earlier target of 5.6 per cent set in June last year, according to Bangladeshi media reports.
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