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Bangladesh Bank ups policy rate by 25 bps, pvt credit growth rate cut

18 Jan '24

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The Bangladesh Bank has raised the benchmark policy rate by 25 basis points to 8 per cent to rein in inflation.
The standing deposit facility rate was raised by 75 basis points to 6.50 per cent and the standing lending facility rate cut by 25 basis points to 9.50 per cent.
Private sector credit growth target was cut to 10 per cent from 11 per cent.

The Bangladesh Bank recently raised the benchmark policy rate by 25 basis points to 8 per cent to rein in inflation while unveiling the monetary policy for the second half of this fiscal.

A contractionary policy stance was maintained by the central bank in the first half (July-December) of the fiscal to reduce demand and contain prices.

The standing deposit facility rate has been increased by 75 basis points to 6.50 per cent and the standing lending facility rate has been reduced by 25 basis points to 9.50 per cent.

The bank has hiked the repo rate twice to 7.75 per cent to raise the cost of money.

The central bank also announced to introduction new exchange rate mechanism named the crawling peg. Private sector credit growth target was lowered to 10 per cent from 11 per cent, according to domestic media reports.

The government expects inflation will come down to 6 per cent during the rest of the current fiscal.

Fibre2Fashion News Desk (DS)

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