The Monetary Policy Committee (MPC) of Bangladesh Bank has decided to keep the policy interest rate unchanged.
The central bank took this decision as overall inflation—despite being on a downward trend—remains above the current fiscal year's target of 7.5%.
Bangladesh Bank announced this information in a press release.
Earlier on July 31, after 21 months, Bangladesh Bank decided to cut the policy interest rate.
At that time, the rate was reduced by 50 basis points from 10% to 9.50%.
That rate will remain in effect.
During the meeting, after reviewing the domestic and global economic situation, the committee noted that the ongoing conflict in the Middle East has created instability in energy prices in the international market.
At the same time, risks to inflation could emerge due to the fuel price hike in the domestic market near the end of September and the implementation of the new pay scale.
Under these circumstances, Bangladesh Bank has decided to observe the impact of internal and external shocks on Gross Domestic Product (GDP) growth and Consumer Price Index (CPI) inflation before making future decisions.
Until then, the committee decided to maintain its stance of making no changes to the policy rate.
The meeting was held on Wednesday at Bangladesh Bank's headquarters under the chairmanship of Governor Md. Mostaqur Rahman.
MPC members Deputy Governor Md. Habibur Rahman, Economist Mostafa Kamal Mujeri, BIDS Director General A.K. Enamul Haque, Chair of Dhaka University's Economics Department Ferdousi Nahar, and Executive Director in charge of the Monetary Policy Department Imam Abu Sayeed were present. The member secretary of the meeting and Director of the Monetary Policy Department, Mohammad Monirul Islam Sarkar, also attended.