Dhaka, May 8 -- In a move to combat inflation, Bangladesh Bank today announced an increase in policy interest rates by 50 basis points and the discontinuation of the SMART interest rate system, which previously helped set lending rates.

The repo rate, a crucial interest rate benchmark, has been adjusted from 8.0% to 8.5%. This increase is expected to impact the interest rates on loans and deposits across the banking sector, potentially moderating credit growth and boosting bank deposits.

Furthermore, the central bank has abolished the SMART system (Six Months Moving Average Rate of Treasury Bills), which was used to determine lending rates. The removal of this system is part of a broader effort to allow interest rates on loans to be mor...