BB cuts policy rate by 50 bps to 9.5% to support economic activity

The Bangladesh Bank's Monetary Policy Committee (MPC) on Thursday decided to cut the policy (repo) rate by 50 basis points to 9.50% from 10% to support economic activity amid slowing investment, private sector credit growth and employment.

The decision was made at the 13th meeting of the MPC, its first for the 2026-27 fiscal year, chaired by Bangladesh Bank Governor Md Mostaqur Rahman at the central bank's boardroom.

The MPC also reduced the Standing Lending Facility (SLF) rate, the upper bound of the interest rate corridor, by 50 basis points to 11% from 11.50%.

However, the committee decided to keep the Standing Deposit Facility (SDF) rate, the lower bound of the interest rate corridor, unchanged at 7.50%.

The revised rates will come into effect from 2 August.

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According to a Bangladesh Bank press release, the committee reviewed developments in domestic and global inflation, as well as trends in investment, private sector credit flow, employment, economic growth and the country's external balance, before making the decision.

The meeting was attended by Md Habibur Rahman, deputy governor of the central bank; Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development; AK Enamul Haque, director general of the Bangladesh Institute of Development Studies; Ferdousi Nahar, chairman of the Department of Economics at the University of Dhaka; Mohammad Akhtar Hossain, chief economist, and Imam Abu Sayeed, executive director of the central bank.

The MPC said the adjustment in the policy rate followed a review of domestic and global macroeconomic conditions, with the aim of maintaining price stability while supporting sustainable economic growth.