Mansur, a former economist at the International Monetary Fund, said interest rates would rise. This may slow the economy further, but it is necessary to overcome the challenges.

The central bank took the decision as people have been struggling with the high level of prices for around two years.

Bangladesh yesterday made three major decisions to cushion the economy against critical risks such as stubborn inflation and depletion of foreign currency reserves.

The Bangladesh Bank today scrapped the SMART formula in order to make interest rates in the banking system fully market-based