Bangladesh Bank (BB) has decided to keep its policy rate unchanged at 10 percent for the second half of the year, continuing its efforts to rein in inflation.
In its monetary policy statement released Thursday, the central bank confirmed that the rate would remain the same for the July-December 2025 period.
Despite a slight easing in monthly inflation to 8.48 percent in June, marking the lowest level since February 2023, the annual average inflation stood at 10.03 percent for the recently concluded fiscal year 2024-25, the highest since at least FY 2013. This is an increase from 9.73 percent a year earlier.
Since May 2022, Bangladesh Bank has raised the policy or repo rate 11 times, most recently increasing it to 10 percent in October 2024. Throughout this period, the bank has maintained a hawkish stance as inflation remained above 9 percent for more than two years until May 2025.
In presenting the monetary policy, Bangladesh Bank indicated that, given the ongoing global economic risks, it will continue its tight monetary policy in the first half of the 2025-26 fiscal year in a bid to control inflation and stabilise inflation expectations.
“If inflation continues to decelerate further, as we expect, the policy rate may be adjusted downward,” said a statement from the central bank.
BB has also indicated that until inflation falls below 7 percent, the policy repo rate will remain at 10 percent. Additionally, the Standing Lending Facility (SLF) rate will stay at 11.5 percent, and the Standing Deposit Facility (SDF) rate will remain at 8 percent.
This decision underscores Bangladesh Bank’s commitment to curbing inflation and stabilizing the national economy amid global challenges.