Bangladesh Bank raises policy rates by 25 basis points

The Bangladesh Bank announced the monetary policy for the second half of the current fiscal year while also raising its policy rates by 25 basis points.

The interest rate at which the central bank lends money to commercial banks, known as the repo rate, would therefore increase to 6% from 5.75% in the first half of 2022–2023.

The rate at which the central bank borrows money from private banks—the reverse repo rate—has gone up to 4.25 percent from 4%.

The BB will be able to step up its fight against inflation, which is currently at a multi-year high, by increasing loan costs as a result of an increase in the repo rate.

Since May 29, the repo rate, sometimes referred to as the policy rate, has increased four times.

The action is consistent with central banks' efforts around the world, which are frantically attempting to quell inflationary pressures amid supply chain disruptions brought on by the Russia-Ukraine war.