Monetary Policy: No increase in policy interest rate

In a bid to bring relief to investment and employment, Bangladesh Bank has decided not to raise the policy Interest rate but instead focus on managing inflation.

The decision was made during a pre-monetary policy committee meeting. Inflation will remain the central focus of all policies. However, even though the interest rate will not be increased, efforts will be made to strengthen the position of Bangladeshi Taka.

In the upcoming monetary policy, Bangladesh Bank has projected a positive economic outlook, largely driven by the upcoming Ramadan. The settlement of import letters of credit (LCs) has been completed, and there is no new pressure on opening letter of credit. As a result, the demand for foreign currency from banks will decrease. Additionally, with the approaching Eid in mid-March, remittance inflows are expected to rise, which will help strengthen the country’s reserves.

Bangladesh Bank’s newly appointed spokesperson, Executive Director Arif Hossain Khan, stated that in the meeting of the monetary policy committee, a decision was made to keep the foreign currency exchange rate market-based and maintain its stability. With sufficient imports of goods, the focus will now be on market-based monitoring to manage inflation.

There is a need to further expand the plan to ensure farmers receive fair prices while reducing intermediaries, making goods more affordable for consumers. For this, coordinated efforts from various departments will be essential to move forward.