A fear of possible spikes in inflationary pressure stemming from ongoing volatility in global fuel prices restrains the central bank from deciding on policy rate cut for now.
The decision on keeping the benchmark interest rate or REPO rate unchanged at 9.50 per cent was taken at the 14th monetary policy committee (MPC) meeting held Wednesday at the Bangladesh Bank headquarters with its Governor Md. Mostaqur Rahman in the chair.
Although the initial plan of the central bank was to cut the policy rate further to spur private-sector investment amid persisting economic sluggishness, the latest upward revision of fuel prices along with implementation of government pay scale prompted the banking regulator to steer a reverse course for averting possible spikes in inflationary pressure, according to MPC members.