DHAKA, Feb. 10 (Xinhua) -- The central bank of Bangladesh on Monday rolled out its monetary policy for the second of the current fiscal year and set policies aimed at bolstering the government's efforts to tame inflation.

The Bangladesh Bank (BB) said the main objective of the half yearly monetary policy, spanning from January to June 2025, is aimed at controlling inflation, with the policy rate, or repo rate, remaining unchanged at 10 percent.

Bangladesh Bank Governor Ahsan H Mansur unveiled the monetary policy at a press conference in Dhaka, saying the new policy sets the inflation target between 7 percent and 8 percent, up from the previous target of 6.5 percent.

He said that the policy rate will remain unchanged until inflation falls below 7 percent.

Bangladesh's inflation slowed to 9.94 percent in January, the first time the rate has dropped to single digits since September last year.

Terming the current stance of monetary policy "reasonably tight", the BB's monetary police statement or MPS said it was also designed to keep the Taka (local currency) attractive as an asset, maintain exchange rate stability and thereby curtail inflationary pressures.

The central bank, however, noted pessimism in terms of economic growth.

"The student-led mass uprising in the summer of 2024, followed by a change in government, had significant impacts on economic activity, leading to consumer and investor uncertainty," the MPS explained.

"This uncertainty manifested as a mere 1.81 percent real (gross domestic product) GDP growth in the first quarter of FY25, down from 3.91 percent in the last quarter of FY24," it added.

"The growth outlook for the second half of FY25 for Bangladesh does not appear optimistic due to the existing challenges," the MPS continued, adding that economic growth may remain sluggish at around 4.0-5.0 percent range in FY25.

The BB, however, in its monetary policy, stated that remittances from workers abroad, strong growth in readymade garment exports, and increased domestic demand from the two upcoming religious festivals are expected to provide support to the economy.

Bangladesh's economy grew at its slowest pace in four years, with the GDP expanding just 4.22 percent in the last fiscal year (July 2023-June 2024). Enditem

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