Bangladesh Bank keeps policy rate unchanged amid high inflation

The central bank’s monetary policy committee (MPC) made the decision at its 10th meeting.

It also left the standing deposit facility (SDF) rate—which allows banks to earn interest on overnight deposits with the central bank—at 8 per cent, and the standing lending facility (SLF) rate—which banks pay when borrowing overnight funds from the central bank—at 11.50 per cent.

"The policy rate will remain unchanged as inflation has not come down to our expected level," deputy governor of the bank Mohammad Habibur Rahman was quoted as saying by domestic media outlets .

The central bank had initially aimed at bringing inflation down to 7 per cent by August and 5 per cent by the end of this year, but recent data show the economy is still some way off these goals.

Bangladesh's inflation rose slightly to 8.36 per cent in September from 8.29 per cent in August, according to the Bangladesh Bureau of Statistics. Inflation had remained above the 9 per cent mark for an extended period; however, it came down to 8.48 per cent in June from 9.05 per cent in May.

The country's foreign exchange reserve is now in a stable position due to a steady foreign exchange market and a market-based exchange rate. As of October 30 this year, the foreign exchange reserve stood at $27.54 billion, up from $19.87 billion during the same period last year.

However, private sector credit growth fell to 6.29 per cent in September, down from 6.35 per cent in August.

ALCHEMPro News Desk (DS)