BB increases its key interest rate by 25 basis points to 5.0pc

The central bank has raised its key interest rate by 25 basis points to 5.0 per cent as part of its efforts to control consumer prices.

The repo rate change, the first since July 2020, will be effective immediately, according to a notice issued by Bangladesh Bank on Sunday.

It cited a hike in the prices of fuel oil, food and non-food commodities on the international market.

Bangladesh’s inflation rose 6.29 percent in April, the highest in 18 months.

The repurchase agreement rate is the rate at which the central bank lends money to commercial banks in the event of any shortfall of funds.

The decision came after Governor Fazle Kabir held a meeting of the Monetary Policy Committee to fix a new rate.

The central bank also noted that the price hike has occurred when the global economy is turning around following expansionary measures taken by countries around the world as the pandemic ebbed.