Bangladesh Bank is expected to maintain a cautious monetary stance in the first half of FY2026–27, keeping inflation control as its top priority despite pressure to boost private sector credit and economic activity.
The policy rate is likely to remain unchanged at 10 per cent even as the government pursues an expansionary budget and a Tk60,000 crore financing programme to revive closed industries.
Governor Md Mostaqur Rahman is scheduled to unveil the Monetary Policy Statement (MPS) for July–December 2026 at 3:00pm on Tuesday at Bangladesh Bank headquarters. It will be the first monetary policy under his tenure after approval from the central bank board.
Officials familiar with policy discussions said Bangladesh Bank sees limited room for monetary easing while inflation remains well above target. They warned that premature relaxation could inject liquidity into the economy and undermine price stability efforts.
The new monetary policy comes at a time when the government is pursuing two competing objectives: curbing inflation while accelerating investment, production and employment.
The FY2026–27 budget targets average inflation of 7.5 per cent and growth of 6.5 per cent. However, Bangladesh Bureau of Statistics data show headline inflation rose to 9.42 per cent in May, the highest since February 2025, remaining above 9 per cent for two consecutive months.
Food inflation stood at 9.06 per cent in May, while non-food inflation reached 9.71 per cent, indicating broad-based price pressures across urban and rural areas.
Against this backdrop, economists said Bangladesh Bank is unlikely to ease its stance despite calls for lower borrowing costs.
Ezazul Islam, Director General of the Bangladesh Institute of Bank Management (BIBM), said cutting the policy rate in the current inflationary environment would not be appropriate.
“If expansionary fiscal policy is accompanied by easier monetary policy, inflationary pressure could intensify further,” he said, adding that the central bank is likely to maintain a cautious, gradual approach.
Bangladesh Bank shifted to a contractionary monetary stance in late 2024, raising the policy rate to 10 per cent to curb inflation. The rate was left unchanged in the previous Monetary Policy Statement in February.
The Standing Lending Facility ceiling remains at 11.5 per cent, while the Standing Deposit Facility floor was lowered from 8 per cent to 7.5 per cent.
