Bangladesh Bank (BB) has hiked the policy interest rate (repo rate) by 50 basis points to 9 percent as part of efforts to rein in inflation.

On Sunday, the central bank took the decision to raise the policy rate at a meeting of the monetary policy committee. Over three months ago, the policy rate was last increased by 50 basis points to 8.5 percent on May 8.

At that time the rate was hiked in line with the prescription of the International Monetary Fund (IMF) as there was no sign of easing in inflation, which stayed over 9 percent since March last year.

After the 12-month average inflation stood at 9.73 percent in FY2023-24, consumer prices were up by 11.66 percent in July, the highest in 14 years. As a result, people's purchasing capacity had worsened, said the Bangladesh Bureau of Statistics (BBS).

The government targeted to keep inflation within 7.5 percent for the last fiscal year. And, this was the fifth year when inflation overshot the budgetary goal.