Bangladesh Bank hikes policy rate by 50 basis points to 8.5%

Bangladesh Bank raised its policy rate by 50 basis points to 8.5% to combat persistent high inflation above 9%. This contractionary move aims to reduce demand and control prices, following multiple rate hikes since May 2022. The central bank also increased the Standing Lending Facility rate to 10% and the Standing Deposit Facility rate to 7% to refine liquidity management. The World Bank warned that high inflation likely pushed 500,000 people into extreme poverty.