Loans to get costlier as BB hikes lending rate to 5.75%

The Bangladesh Bank has increased the repo rate - the interest rate at which banks borrow short-term funds - by 25 basis points to 5.75% in a move to dampen inflation in the country.

In its 56th meeting Thursday (29 September), the Monetary Policy Committee of the central bank took the decision, making loans costlier to some extent. 

The new rate will come into effect on 2 October, reads a central bank circular. 

With the latest hike, the central bank increased the lending rate for the second time in four months. 

Earlier on 30 June, the Bangladesh Bank hiked the repo rate from 5% to 5.50% to check the flow of money in the economy swelled by various government stimulus.

In contrast to the move, the country registered a 14.07% growth in the private sector lending in August.