Bangladesh Bank has cut its policy interest rate, or repo rate, by 50 basis points to 9.50 percent from 10 percent, ending a 21-month period without a reduction. The decision was taken at the central bank’s 13th Monetary Policy Committee meeting on July 30, chaired by Governor Mostaqur Rahman. The new rate will take effect on August 2.

The central bank said it reviewed domestic and global inflation, domestic investment, private-sector credit flows, employment, economic growth and the balance of external transactions before lowering the rate. Commercial banks will be able to borrow from the central bank at a lower rate than before, and lending rates for customers are expected to decline as a result.

Bangladesh Bank also reduced the Standing Lending Facility rate to 11 percent from 11.50 percent, while keeping the Standing Deposit Facility rate unchanged at 7.50 percent. It said the main aim is to increase investment, create employment and accelerate economic growth. Inflation stood at 9.16 percent at the end of fiscal year 2025-26, while the current fiscal year’s target is 6.50 percent.