Bangladesh Bank has maintained a policy interest rate of 10 percent for over a year and a half, yet inflation has not fallen to its 7 percent target. The central bank’s 2025–26 monetary policy review states that despite various government and central bank measures, inflation remained high through June 2026. Weak market structures, supply chain disruptions, and global energy and commodity price pressures were cited as key reasons. Inflation fell from 10.89 percent in December 2025 to 8.49 percent but rose again to 9.42 percent in May 2026.

The review notes that inflation has persisted for more than three years, driven by global supply disruptions, the Russia-Ukraine war, and energy price shocks. Food, transport, and housing-energy sectors contributed most to rising prices, with transport inflation climbing to 9.86 percent and housing-energy inflation to 9.26 percent. Reduced fuel subsidies and higher gas and oil prices further increased production and transport costs.

Bangladesh Bank expects inflation to ease gradually in fiscal year 2026–27 if monetary tightening continues, supply conditions improve, and global price pressures subside. The new monetary policy, to be announced today, is expected to retain a cautious, contractionary stance with the policy rate unchanged at 10 percent.