Bangladesh Bank has cut its policy rate, or repo rate, for the first time in 21 months, lowering it by 50 basis points from 10 percent to 9.50 percent. The cut will let commercial banks borrow from the central bank more cheaply, which is expected to bring down lending rates for customers.
The decision was taken on Thursday at the 13th meeting of Bangladesh Bank’s Monetary Policy Committee (MPC), chaired by Governor Mostakur Rahman. The new rate takes effect on August 2.
In a statement, Bangladesh Bank said the cut was decided after reviewing domestic and global inflation, domestic investment, private-sector credit flow, employment, economic growth and the external balance. The central bank also cut the Standing Lending Facility (SLF) rate from 11.50 percent to 11 percent, while keeping the Standing Deposit Facility (SDF) rate unchanged at 7.50 percent. The main aim of the rate cut is to boost investment, create jobs and accelerate growth.
To curb high inflation, Bangladesh Bank had raised the policy rate 11 times through October 2024 to 10 percent, then held it there for a long period to rein in demand. But inflation did not fall as expected: it stood at 9.16 percent at the end of the just-concluded 2025-26 fiscal year, against a target of below 7.5 percent. The monetary policy for the first half of 2026-27 had also kept the rate at 10 percent, setting a target of bringing inflation down to 6.50 percent by year-end.
The MPC meeting was attended by Deputy Governor Habibur Rahman, Executive Director Mustafa K Mujeri, BIDS Director General AK Enamul Haque, Dhaka University economics department chairman Firdousi Naher, Bangladesh Bank chief economist Mohammad Akhtar Hossain and Executive Director Imam Abu Sayed.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report