The recent unrest and subsequent anarchy following the ousting of the Hasina government have sharply disrupted supply chains, intensifying inflationary pressures on an already strained economy. In July, food inflation surged to 14%, the highest in 13 years, while overall inflation increased by 1.94 basis points to 11.77% from the previous month. In response, the newly appointed Governor of BB raised policy rates by 50 basis points to 9%, making bank borrowing more expensive.
During a meeting between the Dhaka Chamber of Commerce & Industry (DCCI) and Bangladesh Bank, DCCI members expressed concerns that higher borrowing costs could reduce the flow of funds to the SME sector. The BB Governor assured them that efforts would be made to ensure smooth funding for SMEs. He also mentioned plans to establish a Bank Commission to develop a clear roadmap for the country’s banking sector. The Governor expressed optimism that policy rates would be lowered in 6 to 7 months, as inflation is expected to decline.
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