The Bangladesh Bank has hiked the policy rate or repo rate by 50 basis points to 9% to fight the soaring inflation.

This decision was made at a meeting of the monetary policy committee on Sunday. The new rate will come into effect on 27 August, read a press release.

Apart from the interest rate, the banking regulator has also decided to increase the Standing Lending Facility (SLF) rate by 50 basis points to 10.50%. Additionally, the Standing Deposit Facility (SDF) rate has been hiked by similar basis points to 7.50%.

On 8 May, the policy rate was last increased by 50 basis points to 8.5%.

To curb inflation, the central bank has been following a contractionary policy and increasing the policy rate several times since May 2022, which caused the overall interest rates to rise and made borrowing costly.