Tightened monetary policy stifling trade, investment: DCCI

Business Report :

The Dhaka Chamber of Commerce and Industry (DCCI) has voiced deep concern over the Bangladesh Bank’s continued contractionary monetary policy, warning that it is stifling private sector investment, curbing industrial activity, and dampening business confidence.

In its monetary policy statement (MPS) for July-December 2025, the central bank retained the policy (repo) rate at 10 percent, aiming to contain inflation, which has remained stubbornly high at over 9percent in recent months.

However, the DCCI cautioned that the prolonged high-interest regime is proving counterproductive, especially for trade and investment recovery.

Private sector credit growth fell to just 6.4percent in June 2025 its lowest level in 22 years well below the central bank’s earlier target of 10.9percent. The DCCI attributes this sluggish lending to the high cost of borrowing and declining investor sentiment.

The central bank has now revised down the private credit growth target to 7.2percent for the next half-year, compared to 9.8percent previously, raising further concerns over limited capital availability for productive sectors.

The chamber highlighted that the tight policy is disproportionately affecting cottage, micro, small, and medium enterprises (CMSMEs), which are already grappling with rising input costs, an erratic power supply, and an unstable business climate.

In addition, the banking sector’s mounting stress, reflected in non-performing loans (NPLs) reaching a record Tk 5.3 lakh crore or 27.09percent of total loans has severely undermined financial sector confidence and risk appetite.

Calling for a balanced approach, the DCCI urged the central bank to consider pro-growth measures that can stimulate economic recovery without compromising inflation control, especially at a time when the country faces multiple structural challenges.