Bangladesh Bank hikes repo rate by 75 bps to 7.25% to fight inflation
05 Oct 23 1 min read
Insights
- The Bangladesh Bank's monetary policy committee has raised the repo rate by 75 basis points to 7.25 per cent to combat inflation.
- The new rate is effective from today.
- The rate of inflation slipped slightly to 9.63 per cent in September from August's 9.92 per cent—lower than expectations.
- The bank had raised the policy rate from 6 per cent to 6.5 per cent in June.
The rate of inflation slipped slightly to 9.63 per cent in September from August’s 9.92 per cent, but it was not as per expectations.
The central bank had raised the policy rate from 6 per cent to 6.5 per cent in June.
The decision will raise treasury bill rates, which will push the lending rate up. The reference lending rate, also known as SMART (six-month moving average rate of Treasury bill), surged to 7.20 per cent in September, the highest in six months, according to domestic media reports.
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The bank had earlier stopped injecting 'high-powered money' into the economy through 'devolvement mechanism' and curtailed the ratio of liquidity support to the banks as part of measures to fight inflation.
Fibre2Fashion News Desk (DS)
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