The Bangladesh Bank has decided to keep its key policy interest rate unchanged, citing the need to safeguard macro-economic stability in congratulations of the current financial situation.
The current economic situation, inflation trajectory, and external sector pressures also creates additional burden in economy. The central bank warned that inflation could temporarily rise due to anticipated increases in consumer demand during the upcoming national election and the holy month of Ramadan.
The decision was announced in a press release issued by Bangladesh Bank on Tuesday (November 18) following a meeting of the Monetary Policy Committee (MPC), chaired by Governor Dr. Ahsan H. Mansur.
The meeting was attended by key members including Deputy Governor Dr. Md. Habibur Rahman, Chief Economist Dr. Mohammad Akhtar Hossain, BIDS Director General Dr. A K Enamul Haque, Dhaka University Professor Masuda Yasmin, Executive Director Dr. Md. Ejazul Islam, and Member-Secretary Mahmud Salahuddin Naser.
The MPC's assessment showed that inflation in the country is slowly declining. Headline inflation eased to 8.36 percent in September 2025, which is considered a positive recent development. However, the committee noted that the risk of price hikes remains due to potential disruptions in the supply of food items in certain areas.
The report indicated a slight decrease in interbank call money and repo rates, bringing some relief to interest rate pressure following increased investment in government securities. Conversely, private sector credit demand has slowed down, attributed to the uncertainty surrounding the national election.
On the external front, export growth was moderate, while imports increased. The committee clarified that this rise in imports was expected due to the temporary relaxation of Letter of Credit (LC) margins on essential commodities, implemented in anticipation of Ramadan. Remittance flow during this period remained satisfactory.
The central bank cautioned that additional inflationary pressure could stem from factors such as:
Damage to the Aman paddy crop due to adverse weather.
Inflationary tailwinds from the approaching national election.
Increased demand and consumer spending associated with the upcoming Ramadan.
Effects of new payscale announced for govt workers.
Govt okays 50,000MT rice import ahead of Ramadan
After considering all factors, the Monetary Policy Committee unanimously decided to keep the policy rate unchanged at 10 percent.
Consequently, the Standing Deposit Facility (SDF) rate will remain at 8 percent, and the Standing Lending Facility (SLF) rate at 11.5 percent.
The MPC reaffirmed that the contractionary monetary policy stance will be maintained until the real (inflation-adjusted) policy rate reaches 3 percent. This decision aims to safeguard overall macroeconomic stability and keep inflation under control.