In its announcement of the monetary policy for the second half of the current fiscal year 2024–25, Bangladesh Bank maintained the policy interest rate of 10 percent. This is the current governor’s and the interim government’s first monetary policy.

Dr. Ahsan H. Mansoor, governor of Bangladesh Bank, made the announcement of the new monetary policy at a news conference on Monday afternoon, February 10. At the moment, senior central bank officials were there.

One of the nation’s monetary policy tools, the policy interest rate (bank rate), was raised by Bangladesh Bank by 50 basis points to 10 percent on October 22 of last year. The central bank raised the policy interest rate from 9 percent to 9.5 percent on September 24. To combat excessive inflation, Bangladesh Bank raised the policy interest rate by 50 basis points to 9% on August 25. It was then raised to 9.5 percent. The policy interest rate was 5 percent in May 2022. The policy interest rate has been raised ten times in total since that period.

High inflation has long been a problem for the nation. It was uncontrollable in spite of several attempts to raise interest rates. Meanwhile, during the second half of the current fiscal year (2024–25), from January to June, Bangladesh Bank announced another increase in the policy interest rate, or repo rate.

According to entrepreneurs, raising interest rates won’t be able to stop inflation in the present scenario, but there is a chance that it will rise much more. This will affect employment, business, and investment. On this, economists also offered advice. They believed that businessmen looking for investment would be somewhat impacted if the policy interest rate were raised. In this case, last month’s inflation was little lower. Taking into account the total overall situation, the policy interest rate was kept unchanged.

In the meantime, a growth target of 9.8% has been set for private credit. which was the same goal for the current fiscal year’s first half (9.8 percent). Additionally, a growth rate of 17.5% has been set for government credit. 14.2 percent was the prior monetary policy goal for the expansion of government credit.

November’s 7.66 percent growth in private credit was the lowest since May 2021 (7.55 percent). This growth falls well short of the central bank’s goal. For the first half of the current fiscal year 2024-25 (July–December), Bangladesh Bank had set a goal loan growth of 9.8%, which is marginally less than the forecast for the first half of the previous fiscal year 2023–2024.