BB to hike policy rate twice within next month: Governor

Bangladesh Bank (BB) Governor Dr Ahsan H Mansur on Monday informed that the central bank will increase the policy rate twice and interest rate once within the next month in order to tame high inflation in the country.

“There is no doubt that we are going to tighten the monetary policy more. We will increase it by this week and will do it again in the next month. Besides, the interest rate will also be increased again soon,” he said.

The BB governor said this while addressing a press conference at the BB headquarters in the city after holding a meeting of the task force constituted as a part of reforms in the banking sector.

Earlier on August 24 this year, Bangladesh Bank hiked the policy or repo rate-at which commercial banks borrow from the central bank-by 50 basis points to 9 percent to rein in inflation.

Speaking about the current liquidity shortage in banks, the governor said, “There are plans to merge some of the smaller banks that are in a liquidity crunch. Because the majority of these banks are now owned by the government.”

“Initially, we will audit nine banks through a task force. We will audit a total of nine banks in three phases. Islami Bank will be audited in the first phase,” he also said.

The central governor said the audit will focus on the loans given by the bank and identify the beneficiaries of those loans.

“Now the banks that are in a liquidity crisis have a positive net deposit. Yesterday these banks had a positive net deposit of Tk 8.10 billion. This means depositors are withdrawing less than the amount of deposits coming in,” he added.