The Bangladesh Bank has informed the International Monetary Fund (IMF) that it will reduce the policy rate – the interest rate at which the central bank lends to commercial banks for the short term – once inflation is brought under control.
The clarification came during a meeting held today (30 October) between the IMF’s fifth review mission and officials of the Bangladesh Bank, according to a central bank official.
The meeting was chaired by Deputy Governor Habibur Rahman, with two other deputy governors and senior officials from various departments in attendance. The IMF delegation was led by Chris Papageorgiou.
Keep updated, follow The Business Standard’s Google news channel
A Bangladesh Bank official who attended the meeting said, “When the IMF asked about a possible reduction in the policy rate, we informed them that inflation has been declining gradually. We expect it to ease further by January, as the Boro harvest season will help stabilise food prices.”
He added, “We also told the IMF that some adjustments to the policy rate may be made in the new monetary policy to be announced in January.”
Currently, the central bank’s policy rate stands at 10%, while commercial bank lending rates to customers range between 13% and 14%.