Bangladesh Bank announces tight monetary policy for H1 FY26

"If the inflation rate continues to decelerate further, as we expect, the policy repo rate may be adjusted downward; if inflation rate comes below 7 per cent, until then the policy repo rate will remain unchanged at 10 per cent, the standing lending facility (SLF) rate will remain at 11.5 per cent and the standing deposit facility (SDF) rate will be 8 per cent," central bank governor Ahsan H Mansur was quoted as saying by domestic media outlets.

The SDF rate—applicable to banks depositing money with the central bank—was reduced by 50 basis points to 8 per cent on 15 July this year.

Mansur announced the monetary policy for H1 FY26 at a press conference in Dhaka.

As inflation fell to a 35-month low of 8.48 per cent in June and private sector credit growth dropped to 6.4 per cent, business leaders have been urging the government for a cut in interest rates to boost investment. Inflation in the country peaked at 11.38 per cent in November 2024.

The gross foreign exchange reserves rose to $31.72 billion by the end of June this year because of a strong performance in exports and remittances and access to low-interest foreign loans.

ALCHEMPro News Desk (DS)