Business Desk :
With a focus on taming inflation and following the IMF prescription, the Bangladesh Bank is set to announce a contractionary monetary policy for the first six months of the upcoming fiscal year 2023-2024 on 18 June.
A contractionary policy is designed to curb inflation when it is rising too fast.
The new policy – the second under the current government – is expected to raise rates while lifting the lending rate cap and introducing a new lending rate formula for commercial banks.
Central bank’s Governor Abdur Rouf Talukder will make the announcement at 3pm on Sunday at the Jahangir Alam Conference Hall of the bank, according to a release.
The hike in the key interest rates, also known as the repurchase agreement (repo) and reverse repo rates, will make money costlier, thereby discouraging banks from lending.
The repo rate is the rate at which banks borrow funds from the Bangladesh Bank, while the reverse repo rate is the rate at which banks deposit their excess funds with the central bank.
Also, the reverse repo rate will be renamed the Spending Deposit Facility Rate (SDFR) in the new monetary policy.