BB keeps policy interest rate unchanged

To maintain its efforts in curbing inflation, Bangladesh Bank has opted to keep the policy interest rate unchanged for the latter half of the fiscal year.

The announcement came on Thursday (July 31) during a press conference at the central bank headquarters. Bangladesh Bank Governor Dr. Ahsan H. Mansur unveiled the monetary policy, accompanied by deputy governors, senior policymakers, advisors, the chief economist, the director of the research department, and official spokespersons.

Bangladesh Bank has decided to keep the key policy interest rate (repo rate) steady at 10 percent as part of its monetary policy for the first half of the 2025–26 fiscal year.

Governor Dr. Ahsan H. Mansur said, “As long as the inflation rate does not permanently fall below 7 percent, the policy repo rate will be maintained at 10 percent. In addition, the Standing Lending Facility (SLF) rate will remain at 11.5 percent, and the Standing Deposit Facility (SDF) rate will stay at 8 percent.”

Controlling inflation has been identified as the top priority in this monetary policy as well. According to the 2025–26 national budget, the target is to bring average inflation down to 6.5 percent by June next year. The GDP growth target has been set at 5.5 percent.

Bangladesh Bank last increased the repo rate by 50 basis points to 10 percent on October 22, 2024. Under the repo facility, commercial banks borrow short-term funds from the central bank using government securities as collateral.

In the latest monetary policy, the Standing Lending Facility (SLF) rate has been maintained at 11.5 percent. However, the Standing Deposit Facility (SDF) rate—which is the interest banks earn for parking funds with the central bank—was cut by 50 basis points to 8 percent on July 15.