Bangladesh Bank has kept its policy interest rate unchanged at 9.50% for the October-December 2026 quarter, citing potential inflationary pressures from the possible implementation of a new national pay scale and recent fuel price increases.
The central bank made the decision in its first quarterly monetary policy statement, released on Wednesday, September 30. Previously, Bangladesh Bank announced monetary policy on a six-month basis.
According to the statement, headline inflation eased to 8.26% in August, the lowest level in 10 months. However, the central bank said the decline has yet to establish a sustainable trend toward price stability.
Bangladesh Bank warned that recent increases in controlled fuel prices could raise transportation and production costs. At the same time, partial implementation of a new national pay scale could add pressure on inflation as well as government revenue.
Food inflation declined to 7.02% in August, while non-food inflation stood at 9.32%. The central bank expects higher fuel and transportation costs to create additional inflationary pressure in the coming months.
Deputy Governor Dr Habib-ur-Rahman announced the monetary policy decision at Bangladesh Bank’s headquarters. Along with keeping the policy rate unchanged at 9.50%, the central bank retained the Standing Lending Facility rate at 11% and the Standing Deposit Facility rate at 7.50%.
The decision was taken at the 14th meeting of Bangladesh Bank’s Monetary Policy Committee on September 23. The committee discussed the potential impact of global and domestic fuel prices, the prolonged conflict in the Middle East and the possible implementation of a new national pay scale.
Bangladesh Bank also pointed to global risks, including volatility in international oil prices and possible disruptions to shipping through the Strait of Hormuz, alongside domestic fuel price increases and the potential impact of the new pay structure.
The central bank said an early easing of monetary policy could generate renewed inflationary pressure and delay efforts to bring inflation back within the target range. The Monetary Policy Committee will continue to closely monitor the impact of domestic and global developments on economic activity and inflation.
