DHAKA: Bangladesh's central bank raised its key interest rates by half a percentage point with effect from Sunday, its fifth hike since March, as it battles to curb persistently high inflation.
The central bank said it was lifting the repo rate, which it uses to inject money into the banking system, to 7.75 per cent, and increasing the reverse repo rate, through which it absorbs excess cash from banks, to 5.75 per cent.
Annual inflation slowed to 10.63 per cent in December from 11.58 per cent in November as doof prices rises slowed, but officials say the headline figure may resume its climb after the government hiked oil and power tariffs to cut its subsidy bill.
Non-food inflation has been accelerating since May after the government raised oil prices for the first time in three years.
Stubborn inflation prompted the central bank to raise its key interest rates by half a percentage point in September, its fourth hike since March, following an earlier reserve increase and a one percentage point rise in official rates in August 2010
However, the latest hike puts it at odds with many other central banks around the world which having been relaxing policy, or are preparing to ease, to support domestic growth amid the faltering global economy.
Food inflation eased to 10.40 per cent in December from 12.47 per cent in November, but non-food inflation accelerated to 11.38 per cent from 10.16 per cent, the Bureau of Statistics said on Thursday.
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