Bangladesh Bank hikes repo rate by 75 bps to 7.25% to fight inflation

The rate of inflation slipped slightly to 9.63 per cent in September from August’s 9.92 per cent, but it was not as per expectations.

The central bank had raised the policy rate from 6 per cent to 6.5 per cent in June.

The decision will raise treasury bill rates, which will push the lending rate up. The reference lending rate, also known as SMART (six-month moving average rate of Treasury bill), surged to 7.20 per cent in September, the highest in six months, according to domestic media reports.

The bank had earlier stopped injecting 'high-powered money' into the economy through 'devolvement mechanism' and curtailed the ratio of liquidity support to the banks as part of measures to fight inflation.

ALCHEMPro News Desk (DS)