As businesses struggle with weak banking confidence, stalled investment, and high interest rates, Bangladesh Bank is set to announce its monetary policy for the second half of the fiscal year (January–June).
However, official sources indicate the policy will offer no meaningful relief for businesses, investors, or depositors.
Following board approval on Tuesday, the Monetary Policy Statement (MPS) will be announced on Thursday (29 January).
The central bank will maintain a contractionary stance, keeping inflation control as its top priority. The policy repo rate will remain unchanged at 10%.
Although headline inflation fell to 8.17% in October, it rose again in November and December to 8.29% and 8.49% respectively.
Persistent food price volatility, supply chain weaknesses, and production constraints continue to sustain inflationary pressure.
Non-food inflation remains above 9%, placing continued strain on middle- and low-income households. Bangladesh Bank is therefore unwilling to lower interest rates.
Economists and business leaders question how investment can recover while borrowing costs remain high and banks face liquidity constraints.
Analysts argue the crisis reflects deeper structural and governance failures, including weak enforcement against loan defaulters and declining public trust in banks.
As deposit growth slows, credit expansion is expected to remain limited despite unchanged policy rates.
Private-sector credit growth reached only about 6.5%–6.6% by November, below the 7.2% target.
Although the new policy aims for 8% growth by June, business leaders view this as unrealistic given high lending rates, fragile banks, policy uncertainty, and weak demand.
The interest rate corridor—including SLF, SDF, and overnight repo rates—will see no major changes.
Average lending rates remain close to 15%, constraining private investment, industrial expansion, and employment.
Economist Moinul Islam believes there was room for limited easing, citing a more stable dollar market and easing import pressures. Bangladesh Bank counters that inflation must fall further to reduce costs and restore economic momentum.
Governor Ahsan H Mansur acknowledged calls for lower rates but said conditions are not yet suitable.
He noted that since August 2024, the central bank has purchased about $3.7 billion from the market, helping rebuild reserves and stabilize external accounts.
Economists warn that without stronger action against major defaulters, better depositor protection, and greater regulatory independence, the policy will have limited impact on the real economy.
Business leaders fear it will remain tough on paper but weak in practice.
