MPD Circular No. 05: Re-fixation of Repo and Reverse Repo interest rates of Bangladesh Bank

Bangladesh Bank Chief Executive Motijheel, Dhaka -1000 Bangladesh Monetary Policy Department Deputy Governor MPD Circular No.-05 Date: July 29, 2020 Shraban 14, 1427

Managing Director / Chief Executive All Scheduled Bank Companies and Financial Institutions operating in Bangladesh

Regarding the change in the Repo and Reverse Repo interest rates of Bangladesh Bank

Dear Sir,

Reference is drawn to your attention MPD Circular No.-04 dated April 9, 2020 regarding the re-fixation of the Repo interest rate.

2. In order to restore the affected economy due to the current novel coronavirus pandemic, Bangladesh Bank has already adopted an expansionary and accommodative monetary policy for the fiscal year 2020-21. In this continuity, with the aim of reducing the funding costs of banks as well as increasing liquidity according to demand, the existing overnight repo interest rate has been reduced by 50 basis points from 5.25% to 4.75%, and the reverse repo interest rate has been re-fixed by reducing it by 75 basis points from 4.75% to 4.00% with the objective of rationalizing the policy interest rate corridor.

This directive will be effective from July 30, 2020.

Yours faithfully,

(Md. Julhas Uddin) Deputy General Manager Phone: 9530059