BB keeps key policy rates unchanged

Bangladesh Bank has decided to keep the key policy rates unchanged as it sees risks to the inflation outlook for the current fiscal year.

The repurchase rate will remain unchanged at 7.25 percent.

“The persisting inflationary pressures over the past few months with the risks ahead related to the inflation outlook imply that achieving the FY15 inflation target of 6.5 percent will be challenging,” BB said in its monetary policy statement issued today.

bbThe central bank set the ceiling for private sector credit growth at 16.5 percent. BB views the figure as indicative ceiling.

“Banks continue to be advised to lend only to creditworthy clients for productive purposes and whether this ceiling is reached or not depends ultimately on investor appetite and the bank’s assessment of project viability,” it said.

The cash reserve requirement was raised in June by 50 basis points to absorb part of the excess liquidity and help contain inflation.

GDP growth will pick up in FY15 and could range between 6.2 and 6.5 percent if there is no major disruption to economy, BB said.

Star Online Report