# Bangladesh holds rates at 9.50% despite cooling inflation Author: Hatice Ertaş Language: English Published: 2026-10-01T03:30:46+03:00 Updated: 2026-10-01T03:30:46+03:00 ![A textile worker’s hands at a loom with fabric in the colours of Bangladesh’s flag](https://kriptometa.com/uploads/enflasyon-geriledi-banglades-faizi-de-tuttu-f7659c027a97_article.webp) ## Key takeaways - The policy rate stays at 9.50% for October–December 2026, with no further cut announced. - Headline inflation eased to 8.26% in August, while non-food inflation remained at 9.32%. - The central bank warned that energy costs and potential wage adjustments could renew price pressures. Bangladesh Bank is balancing weak credit demand against persistent price pressures. Its first quarterly policy statement also explains why cheaper funding has yet to translate into a stronger investment recovery. Bangladesh Bank has kept its policy rate at 9.50% despite a slowdown in inflation. Its October–December 2026 monetary policy statement, released on September 30, identifies energy prices and potential wage increases as major obstacles to further easing. The Monetary Policy Committee took the decision at its September 23 meeting. The bank’s [first quarterly policy report](https://www.bb.org.bd/monetaryactivity/mps/mps_q2fy27.pdf) sets out two competing pressures. Price growth is slowing, but a lasting improvement is not assured. Meanwhile, industrial activity and private-sector lending suggest the economy has yet to enter a strong recovery. ## Food inflation eases, but energy risks persist Annual headline inflation fell from 9.16% in June to 8.26% in August. Food was the main driver of that decline, with food inflation easing to 7.02%. Non-food inflation remained at 9.32%, however. The improvement in the headline measure is not being matched as quickly across households’ transport, energy and service costs. The central bank says domestic fuel-price adjustments in late September could raise production and transport costs. Disruption in the Strait of Hormuz, volatile global energy prices and the partial implementation of a national pay scale are also among the risks identified in the report. > “to support economic activity without compromising the disinflation process.” Bangladesh Bank’s description of its central policy challenge, September 30 statement An unchanged policy rate does not mean financial conditions are unchanged in every respect. Inflation and expectations affect the [real interest rate](https://kriptometa.com/en/glossary/real-interest-rate), which adjusts nominal rates for purchasing power. The bank’s assessment therefore extends beyond the latest headline inflation reading. ## Cheaper funding has yet to revive lending The policy rate was cut by 50 basis points in a decision taken in late July. Interbank rates and government bond yields subsequently declined, according to the report. Lower funding costs have not translated into vigorous private-sector lending: credit growth remained at 4.75% in August. The bank points to weak investment demand, borrower risk and problems on some lenders’ balance sheets as constraints on transmission. Liquidity is also unevenly distributed. Excess funds held by stronger institutions do not automatically resolve the funding pressures facing weaker banks. **9.50% is not a consumer-loan rate.** It is the central bank’s policy repo rate. The Standing Lending Facility rate remains at 11.00%, while the Standing Deposit Facility rate stays at 7.50%. ## A first quarterly policy statement The new document is the first to move [Bangladesh’s monetary policy publication schedule](https://www.bb.org.bd/en/index.php/monetaryactivity/monetarypolicy) from a half-yearly to a quarterly cycle. More frequent assessments do not imply an automatic rate change every quarter. The bank says it will calibrate policy in response to global and domestic developments. For the wider [interest-rate and inflation debate](https://kriptometa.com/en/news/economy), the decision highlights the tension between supporting activity and containing persistent price pressures. [The Daily Star’s September 30 post on the first quarterly policy decision](https://x.com/dailystarnews/status/2105225334295814195) Channel 24’s 49-second Bengali-language report, published on September 30, summarises the rate hold and the risks from energy costs and wages. [Watch Channel 24’s report on the rate decision](https://www.youtube.com/watch?v=viYhCiSeiuY)