Bangladesh Bank has kept its key policy rate, the repo rate, unchanged at 10 percent in the first half of the 2025–26, prioritising inflation control over calls to stimulate investment through lower interest rates.
Governor Dr. Ahsan H. Mansur announced its half yearly monetary policy statement (MPS) at a press conference held at the central bank headquarters on Thursday.
The central bank’s stance comes at a time when inflation has cooled significantly, reaching its lowest point in 35 months as of June.
Private sector credit growth, however, has also slowed, dropping to just 6.40 percent. Business leaders have been calling on the central bank to cut interest rates to encourage investment, but the regulator remains cautious.
“As long as the inflation rate does not consistently stay below 7 percent, the policy repo rate will remain at 10 percent,” Governor Mansur said.
The central bank also maintained the standing lending facility (SLF) rate at 11.5 percent and the standing deposit facility (SDF) rate at 8 percent.
Notably, the SDF rate was cut by 50 basis points on July 15 to encourage more lending by reducing returns on deposits kept with the central bank.
Inflation control remains the main focus of the new monetary policy. The government aims to bring average inflation down to 6.5 percent by June 2026, while GDP growth is targeted at 5.5 percent for the fiscal year.
Bangladesh Bank last raised the repo rate by 50 basis points in October 2024 to its current 10 percent, in an effort to rein in persistent inflation.
The repo rate allows commercial banks to borrow short-term funds from the central bank against government securities.
Despite growing pressure from the business community for a more growth-friendly monetary stance, the central bank is standing firm, signaling that inflation stabilization remains its top priority.
Senior officials, including the deputy governor, policymakers, advisers, the chief economist, and directors of research and communications, were present at the event.