Bangladesh Bank Reduces Borrowing Costs to Boost COVID-19-Hit Economy

The Bangladesh Bank (BB) has announced plans to reduce borrowing costs, by slashing various policy rates in a bid to boost Bangladesh’s COVID-19 economic recovery. According to the monetary policy statement for Fiscal 2020-21 (FY21) released by BB on the 29th of July 2020, the BB has reduced the repurchase rate by 50 basis points (bps) to 4.75% from 5.25% and the reverse repo rate by 75 bps to 4% from 4.75%. Furthermore, the BB has also reduced the bank rate, which had remained unchanged since 2003, by 100 bps to 4% from 5%. The rates change will be effective soon.

According to the BB, the main aim of the monetary policy plans for FY21 is the recovery of the economy following the COVID-19 pandemic,...