Bangladesh Bank Hikes Interest Rates Amid Soaring Inflation

Bangladesh's central bank will increase interest rates to 9% from 8.5% aiming to control rising inflation, which reached 11.66% in July. Governor Ahsan H. Mansur, recently appointed, might further increase rates to 10% or more and is seeking additional financial support from international institutions like the IMF, World Bank, ADB, and JICA.

Bangladesh's central bank is set to raise interest rates to 9% from 8.5%, aiming to control escalating inflation, which hit 11.66% in July. The bank's newly appointed governor, Ahsan H. Mansur, disclosed this in an interview with the BBC on Thursday.

The decision follows weeks of political turmoil that have contributed to economic challenges, including diminishing reserves and a decline in garment exports. Mansur, who assumed the governor role just a week ago, indicated that rates might increase further to 10% or more in the coming months.

Mansur also mentioned ongoing discussions with the International Monetary Fund to secure an additional $3 billion in bailout funds. Bangladesh is also seeking extra financial assistance from the World Bank, Asian Development Bank, and Japan International Cooperation Agency.

(With inputs from agencies.)