BB raises repo rate by 50 basis points

Bangladesh Bank (BB) has increased the policy rate, also known as the repo rate, by 50 basis points to 7.75 per cent to contain inflation.

The new rate will be effective from Monday, according to a Bangladesh Bank press release.

The monetary policy committee of the central bank decided to raise the policy rate at a meeting at the central bank headquarters in the capital.

The repo rate is the rate at which the BB lends money to commercial banks or financial institutions.

As per the decision, the highest ceiling of policy rate corridor of standing lending facility (SLF) rate has been raised to 9.75 per cent from 9.25 per cent while the lowest limit of standing deposit facility (SDF) rate has been raised to 5.75 per cent from 5.25 per cent.

The reference lending rate, also known as SMART (six-month moving average rate of Treasury bill), has been surged by 25 basis points for all sectors.

Earlier on October 4, the central bank, in its monetary policy statement, raised the repurchase agreement (repo) rate to 7.25 per cent from 6.50 per cent to control inflation and regulate the overall interest rate environment.

/KN/