The Bangladesh Bank plans to increase the policy rate twice and interest rate once by October to combat rising inflation, which has surpassed 10 percent. Governor Ahsan H Mansur announced that the policy rate will rise by 50 basis points to 9.50 percent this month, with another hike expected next month. Despite recent rate increases, inflation remains high, prompting further tightening measures aimed at stabilizing inflation, the exchange rate, and the balance of payments. Additionally, the central bank is working to reduce the government’s borrowing target from the banking sector. Mansur noted that GDP growth may fall below expectations but emphasized the importance of macroeconomic stabilization. Meanwhile, the cash flow at crisis-hit banks is improving, and the central bank is providing liquidity support guarantees.
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