The Bangladesh Bank Raises the Policy Rate to Combat Inflation: Repo Rate Increased to 9.50%

As outlined in a recent circular, the Bangladesh Bank has raised the policy rate, also known as the repo rate, by 50 basis points to 9.50%, in an effort to curb double-digit inflation. This new rate took effect on Wednesday, 25 September 2024.

Consequently, the cost of borrowing for banks from the central bank will increase, leading to a corresponding rise in interest rates on bank loans and deposits.

Additionally, the circular mentions that the upper limit of the policy rate corridor for Standing Lending Facilities has been increased from 10.50% to 11%, while the lower limit for Standing Deposit Facilities has been raised from 7.50% to 8%.