The Bangladesh Bank has decided to keep its policy rate unchanged at 10 per cent amid mounting pressure from businesses to lower borrowing costs as high interest rates continue to strain corporate finances and restrict investment.
BB spokesperson and executive director Arief Hossain Khan told 抖阴精品 that the decision was taken at a meeting of the central bank鈥檚 monetary policy committee on Monday.
He said that the committee reviewed the latest trends in inflation, liquidity, exchange rate and overall economic conditions before maintaining the existing rate.
Although inflation has started to ease 鈥� falling to 8.29 per cent in August from over 9 per cent for 35 consecutive months until May 2025 鈥� the central bank opted to keep the key policy rate steady.
The rate was last raised to 10 per cent in September 2024 as part of a tightening stance to rein in price pressures.
In its monetary policy statement, or MPS, released on July 30, the Bangladesh Bank said that it would maintain a restrictive policy during the first half of the 2025-26 financial year to anchor inflation expectations.
The statement noted that if inflation fell below 7 per cent, the policy repo rate might be revised downward, but until then, it would remain unchanged.
The central bank aims to reduce inflation to 6.5 per cent by June 2026, but warned of persistent risks from volatile global commodity prices, currency depreciation and rising import costs.
While policy repo rate and Standing Lending Facility rate remain fixed at 10 per cent and 11.5 per cent respectively, the central bank reduced Standing Deposit Facility rate 鈥� floor of interest rate corridor 鈥� by 50 basis points to 8 per cent in its MPS.
The move is intended to discourage banks from holding idle funds at the central bank and to encourage greater lending on the market.
However, the unchanged repo rate means that banks continue to face high borrowing costs from the BB, keeping lending rates for businesses elevated.
For firms already struggling with weak demand, higher input costs and a volatile currency, the sustained high interest environment has made borrowing increasingly expensive, limiting their capacity to finance operations and expansion.
