The reason for continued high consumer prices in the country despite prices dropping in the international market is a combination of policy and institutional failure.

Banks determine their lending interest rates based on the cost of borrowing, non-fund operating costs, margin for default risk, and desired profit margin.

The Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) has sought cooperation from the central bank so that the interest rate on loans does not increase by a large margin. 

The Bangladesh Bank has decided to raise the interest rate on consumer loans to 12 per cent from 9 per cent after economists have long called for the withdrawal of the cap on all loans to contain inflation. 

Bangladesh Bank can better fix the currency turmoil by freeing both interest rate and exchange rate to adjust over time.

Bangladesh needs proper macroeconomic management to avoid middle income trap

The economy needs firm handling to ensure the situation doesn't turn into a crisis.

The Bangladesh Bank today raised the interest rate on the loans made from its Export Development Fund (EDF) by 50 per cent with a view to making borrowing costlier and thus saving foreign currencies.