Bangladesh Bank will maintain its policy interest rate at 10 percent, continuing its contractionary monetary stance until inflation drops below 7 percent, the central bank announced on Thursday.

Unveiling the Monetary Policy Statement (MPS) for the first half of the 2025–26 fiscal year, Governor Dr Ahsan H. Mansur said the current approach would remain in place through December as part of efforts to contain inflation and stabilise the economy.

“Inflation has declined in recent months due to the tight monetary stance,” Mansur said, “but we have not yet reached the targeted level.”

The Standing Lending Facility and Standing Deposit Facility rates will remain at 11.5 percent and 8.0 percent, respectively. The central bank also lowered its projection for private-sector credit growth to 7.2 percent, down from 9.8 percent in June.

Trade bodies have expressed concern that the continued high cost of borrowing could further restrict private investment and dent business confidence.

The MPS outlines challenges facing the economy, including high inflation, foreign-exchange pressure, persistent liquidity constraints, and rising non-performing loans. In response, the central bank has prioritised price stability, rebuilding reserves, and governance reforms in the financial sector.

Mansur dismissed suggestions that the policy sacrifices growth, saying macroeconomic stability is essential. “Artificial growth through excessive money injection is not sustainable,” he said.

Since May 2022, the central bank has raised the policy rate 11 times to rein in inflationary pressures.