Bangladesh Bank (BB) is likely to keep its key policy interest rate unchanged at 10 percent shelving an earlier plan to lower the rate amid growing global economic uncertainty triggered by the recent geopolitical tensions in the Middle East.
The central bank is scheduled to announce the monetary policy on Tuesday afternoon at a press conference.
The governor initially convened a meeting of the Monetary Policy Committee (MPC) with a proposal to reduce the policy rate in an effort to lower borrowing costs, encourage private sector investment and support employment generation, according to Bangladesh Bank sources.
However, the central bank later dropped the plan after the sudden escalation of tensions in the Middle East raised fresh concerns over global economic stability and the risk of renewed inflationary pressures, the sources said.
The decision comes despite private sector credit growth falling to a record low.
In its monetary policy for FY2025-26, Bangladesh Bank projected private sector credit growth to reach 8.50 percent by June. However, official data showed that credit growth stood at only 4.75 percent at the end of April, the lowest level on record.