Bangladesh Bank has announced the monetary policy for the first six months of the financial year 2023-24. The repo rate has been raised as expected in monetary policy. Along with this, the bank loan interest rate limit has been lifted.
Bangladesh Bank Governor Abdur Rauf Talukder announced the monetary policy at 3 pm today. There he informed about these changes. He said that the repo rate has been increased by 50 basis points to control inflation. In this, the repo rate will increase from 6 percent to 6.50 percent. Along with this, the reverse repo rate has been increased by 25 basis points from 4.25 to 4.50 percent.
Bangladesh Bank has started increasing the repo rate since last year to deal with high inflation. As a result, since then there is a discussion to lift the interest rate limit of commercial bank loans. This time the monetary policy announcement said that due to the increase in policy interest rate, Bangladesh Bank has also decided to lift the interest rate limit on loans from commercial banks and non-banking financial institutions.
Competitive and market-based interest rates will be in effect instead of interest caps, though there will be margins. Bangladesh Bank says, through this, the supply of additional currency to the society will be rushed. They believe that this decision will also be useful in dealing with inflation.