BB hikes policy rate by 50 basis points to 8.50%

Bangladesh Bank (BB) has raised the policy rate by 50 basis points to 8.5 percent to bring down the runaway inflation.

The central bank on Wednesday took the decision at a meeting of the Monetary Policy Committee (MPC) at BB headquarters in the city.

Abdur Rouf Talukder, BB governor, presided over the meeting. The other members of the committee Dr. Md. Habibur Rahman, BB deputy governor; Dr. Sadiq Ahmed, economist, Dr. Binayak Sen, director general, Bangladesh Institute of Development Studies (BIDS); and Dr. Md. Ezazul Islam, executive director, Bangladesh Bank, were present in the meeting.

Kazi Sayedur Rahman, BB deputy governor, also was present.

"To anchor inflation expectations at the desired level, the policy rate will be increased by 50 basis points to 8.50 percent from 8.00 percent.

Additionally, the Standing Lending Facility (SLF) rate will be increased by 50 basis points to 10.00 percent from 9.50 percent, and the Standing Deposit Facility (SDF) rate will be increased by 50 basis points to 7.00 percent from 6.50 percent, maintaining the policy rate corridor 150 basis points accordingly," as per a BB press release.

The decision will be effective immediately. The monetary contractionary measures will be continued until the inflation target is achieved.