BB readjusts interest rate corridor to tackle double-digit inflation

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Business Report :

Bangladesh Bank (BB) on Tuesday increased the policy rate, also known as repo rate, again by 50 basis points to 9.50 per cent to contain double-digit inflation.

The new rate will be effective from Wednesday (September 25), said a circular issued on the day. This is the fourth hike this year and 11th since May 2022.

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As a result, the interest rate of the money that the banks borrow from the central bank will increase.
Additionally, there will be a rise in the interest rate on bank loans and deposits.

Bankers said that due to the rate hike, the interest rate for any commercial bank facing a liquidity crisis will rise.
Also, loan interest rates for customers will increase. Consequently, higher loan rates are expected to reduce consumer spending, which should help decrease inflation gradually.

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