<p>Bangladesh’s central bank raised its key interest rates by half a percentage point on Thursday, its second hike in a month, as it battles stubbornly high inflation.</p>.<p>The central bank said it had raised the repo rate, which it uses to inject money into the banking system, by 50 basis points to 5.50% to deal with demand side pressures and to ensure the flow of funds to priority and productive sectors.</p>.<p>The move came after the south Asian country's annual inflation hit an 8-year high in May. The central bank last raised the key interest rate by 25 basis points on May 29.</p>.<p>The bank said it would continue its support to implement the government's ongoing 2 trillion taka ($21.40 billion) stimulus packages alongside its own refinance schemes in the face of new adversities, including the Russia-Ukraine war and the Covid-19 pandemic.</p>.<p>The central bank also raised the private sector credit growth target to 14.1% for the 2022/23 financial year that starts on July 1 from 13.1% in the current financial year.</p>.<p>It said it would introduce a new refinance line of credit for import-substituting products to minimise import dependency and save valuable foreign exchange reserves.</p>.<p>Bangladesh's foreign exchange reserves fell to $41.9 billion as of June 28 from $46.4 billion at the end of June 2021, the central bank said.</p>.<p>With reserves dwindling, the government has taken a series of measures including curbing non-essential imports, relaxing rules to attract remittances from millions of migrants living overseas and restraining foreign trips of its officials.</p>.<p>Bangladesh aims to boost economic growth to 7.50% for the 2022/23 financial year from 7.25% in 2021/22 on the back of garment exports and remittances from Bangladeshis working overseas.</p>.<p>The central bank, however, said deadly flooding this month and a prolonged Russia-Ukraine war could hold back growth.</p>
<p>Bangladesh’s central bank raised its key interest rates by half a percentage point on Thursday, its second hike in a month, as it battles stubbornly high inflation.</p>.<p>The central bank said it had raised the repo rate, which it uses to inject money into the banking system, by 50 basis points to 5.50% to deal with demand side pressures and to ensure the flow of funds to priority and productive sectors.</p>.<p>The move came after the south Asian country's annual inflation hit an 8-year high in May. The central bank last raised the key interest rate by 25 basis points on May 29.</p>.<p>The bank said it would continue its support to implement the government's ongoing 2 trillion taka ($21.40 billion) stimulus packages alongside its own refinance schemes in the face of new adversities, including the Russia-Ukraine war and the Covid-19 pandemic.</p>.<p>The central bank also raised the private sector credit growth target to 14.1% for the 2022/23 financial year that starts on July 1 from 13.1% in the current financial year.</p>.<p>It said it would introduce a new refinance line of credit for import-substituting products to minimise import dependency and save valuable foreign exchange reserves.</p>.<p>Bangladesh's foreign exchange reserves fell to $41.9 billion as of June 28 from $46.4 billion at the end of June 2021, the central bank said.</p>.<p>With reserves dwindling, the government has taken a series of measures including curbing non-essential imports, relaxing rules to attract remittances from millions of migrants living overseas and restraining foreign trips of its officials.</p>.<p>Bangladesh aims to boost economic growth to 7.50% for the 2022/23 financial year from 7.25% in 2021/22 on the back of garment exports and remittances from Bangladeshis working overseas.</p>.<p>The central bank, however, said deadly flooding this month and a prolonged Russia-Ukraine war could hold back growth.</p>