Dhaka, July 29 -- Bangladesh Bank is set to announce a new monetary policy on Thursday for the first half of the current fiscal year 2025-26.

Meanwhile, the central bank has completed preparation for announcing a new slightly expansionary monetary policy, reducing interest rates to enhance credit flow in the private sector, said a senior official of the monetary policy department.

Bangladesh Bank followed a contractionary monetary policy in the last two fiscal years to halt growing inflation. As a result, the private sector credit flow fell below 7 percent in June 2024, due to the high interest rates.

A contractionary monetary policy is a type of monetary policy that is intended to reduce the rate of monetary expansion to fight inflati...