Bangladesh Bank is set to unveil the monetary policy for the first half of FY25 in the third week of July, to bring down inflation which has persistently remained high.
Inflation in Bangladesh has been hovering at over 9% since March last year and the central bank’s existing tight monetary policy stance is yet to help cool down consumer prices.
The central bank is preparing to announce the new monetary policy sometime between July 15 and July 20, said a member of the monetary policy committee.
As a part of the preparations, its monetary policy department will start holding meetings with stakeholders and economists from July 7.
The monetary policy department set a meeting with central bank officials of the executive director grade and above on July 7 to avail opinions on the preparation of the new monetary policy.
Then, they will hold meetings with other stakeholders and economists until July 15.
The central bank has taken a series of initiatives to tackle ongoing economic challenges, especially to rein in skyrocketing inflation, but to no avail.
On a 12-month average during June 2023 and May 2024, the inflation rate was 9.73%, much higher than the Bangladesh Bank ‘s target of 7.5% for the outgoing FY24.
The government has set a goal to contain the consumer price hike at 6.5% for FY25.
The banking regulator raised the policy rate several times since May 2022 to increase the cost of money.
In May the Bangladesh Bank raised the policy rate by 50 basis points to 8.5% to rein in inflation.
In the same month, the central bank relaxed the bank interest rate and US dollar exchange rate as per the prescription of the International Monetary Fund.
Central bank officials said the banking regulator was likely to hike the policy rate further to tame inflation.
Industry insiders said the Bangladesh Bank was still injecting money into some weak banks, for which, despite the presence of a tight monetary policy, it has not been possible to cool down inflation.
The Bangladesh Bank unveiled its monetary policy for the second half of the current fiscal year, with the goal to tame runaway inflation, which has been a concern for the past two years. Here are the major points of this monetary policy, and how they might — at least in theory — ensure a smooth economic journey for Bangladesh over the next six months.
Policy rate raised to 8 percent
