Bangladesh Bank raises interest rate
Bangladesh Bank today increased its policy rate by 25 basis points in a major development that is likely to make credit costly and curb inflation.
The new policy rate, known as repurchase agreement, is 5 per cent meaning that banks will have to borrow from the central bank at this rate.
For all latest news, follow The Daily Star's Google News channel. It, however, kept the rate of reverse repo unchanged at 4 per cent, according to a circular issued by the Bangladesh Bank.
The rate revision comes two years after the central bank cut policy rate by 50 basis points from 5.25 per cent.
In Bangladesh, the central bank last increased the policy rate on January 5 in 2012, raising it by 50 basis points to 7.75 per cent. The rate has gone down over the years.
The central bank cut the policy rate three times in 2020 in order to implement its unconventional monetary policy, which helped businesses borrow from banks at a lower cost.
In July 2020, the BB slashed the rate by 50 basis points to 4.75 per cent.
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