ZOOMBANGLA DESK: Bangladesh Bank is ready to announce a contractionary monetary policy statement tomorrow, withdrawing the single-digit interest cap to combat rising inflation, the central bank sources said.

Usually, contractionary monetary policy is used to contain inflation and reduce the level of money circulating in the economy.

Governor of Bangladesh Bank, Abdur Rouf Talukder, will release the policy statement for the first half (July-December) of FY 2024 at a press conference in Bangladesh Bank tomorrow.

The chief of BFIU, deputy governors, Chief Economist, executive director of the Research Department, and concerned officials of Bangladesh Bank will be present at the event.

The central bank formulates monetary policy to create a balance between inflation and achieving the desired growth.

When asked about the new monetary policy, Bangladesh Bank Executive Director and Acting Spokesperson, Abul Bashar, told UNB that the central bank governor will officially announce the monetary policy tomorrow. “This monetary policy will focus more on controlling inflation, and the introduction of a single currency exchange rate,” he said.

Besides, there will be new announcements on interest rates and the current 9 percent cap will be waived and rationalized, he said.

According to Bangladesh Bank sources, the central bank will introduce a new system by removing the existing 9 percent interest rate limit on loans. The interest rate will be effective from July 1, the first month of the new fiscal year. (UNB)