Bangladesh Bank May Partially Lift Interest Rate Cap

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Recently Bangladesh Bank (BB) governor, Abdur Rouf Talukder, met IMF vice-president to discuss at length Bangladesh’s request to get USD 4.5bn loan for forex reserve and budget support. Meanwhile, a delegation from the IMF will arrive in Dhaka next week to start negotiations on the requested loan. IMF has sought several reforms and one of them is lifting lending rate cap. Several newspapers have stated that BB is considering partially lifting interest rate cap, initially on consumer loan.

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Monetary Policy Statement Review 1HFY24

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Bangladesh Bank (BB) adopts contractionary monetary policy stance with a target inflation of 6.00% (May’23 12-month average inflation was 8.84%) raising the policy rates by 50 bps, removing the earlier imposed lending rate cap, setting market driven reference based lending rate ceiling and transitioning from monetary targeting to an interest rate targeting framework.

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