The central bank today cut the private sector credit growth target to 10 percent from 11 percent to lower demand in an economy that has been witnessing higher inflation for the past two years.

The announcement comes as the Bangladesh Bank unveiled the monetary policy for the second half of the current fiscal year during an event at the central bank headquarters in the capital.

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Bangladesh Bank hikes policy rate by 25 basis points to 8%

It also raised the benchmark policy rate by 25 basis points to 8 percent.

The projected growth in public sector credit is 27.8 percent, down from 31 percent set for the current financial year earlier, reflecting the government's selective expenditure on priority projects as part of its austerity policy measures, which are expected to reduce credit demand.

The projection is underpinned by BB's supply-side interventions, aimed at directing credit flow into more productive and employment-generating sectors, the BB said.

Considering these growth rates in both the public and private sectors, domestic credit growth is projected to grow by 13.9 percent by the end of June 2024.