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Dhaka Tribune

Loans will be a little more expensive

Bangladesh Bank hikes lending rate by 0.25%

Update : 29 Sep 2022, 07:39 PM

The Bangladesh Bank on Thursday raised the repo rate -- the interest rate at which banks borrow short-term funds -- by 25 basis points to 5.75%, in a move aimed at dampening inflation in the country.

The policy rate is a benchmark interest rate that commercial banks follow for fixing interest rates on both loans and deposits.

A hike in policy rates makes loans more costly.

In its 56th meeting, the monetary policy committee of the central bank took the decision, making loans costlier to some extent. 

With the latest hike, the central bank increased the lending rate for the second time in four months. 

Earlier on June 30, the Bangladesh Bank hiked the repo rate from 5% to 5.50% to check the flow of money in the economy swelled by various government stimuli.  

The new rate will come into effect from October 2, read the central bank circular. 

In July, inflation fell to 7.48% from a nine-year high of 7.56% in June.

Hiking the policy rate means the central bank is now stricter in supplying money to the market than before.

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