In a surprise move, Bangladesh Bank has raised its key interest rate, or repurchase agreement rate, by 25 basis points to 5.75 per cent as part of its efforts to control consumer prices.
The decision comes three months after the previous hike on June 30, when it raised the repo rate by 50 basis points to 5.50 per cent, reports bdnews24.com.
The repurchase agreement rate, also known as the overnight repo rate, is the rate at which the central bank lends money to commercial banks in the event of any shortfall of funds.
The repo rate hike comes a day after the central bank raised the interest on short-term borrowing against foreign currency by 50 basis points.
Many central banks across the world have recently raised their key policy rates in an attempt to rein in global inflation. The Federal Reserve, the central bank of the US, raised its rate for the fourth time in July.
Bangladesh's central bank left the reverse repo rate unchanged at 4 per cent.
