Bangladesh Bank (BB, the central bank) is expected to focus on the fight against inflation in the early part of the forecast period, when we expect it to take incremental steps to tighten monetary policy. Concerns that rapid private-sector credit growth is helping to stoke inflationary pressures prompted BB to raise the cash reserve requirement for commercial banks in December 2010 to 6%. BB took further action in March this year, when it increased the repurchase (repo) rate and reverse repo rate by 50 basis points each, to 6% and 4% respectively. The central bank has traditionally preferred to use the repo and reverse repo rates to influence money-market interest rates, rather than making changes to the discount rate, which has remained at 5% for the past six years. We expect BB to implement additional rises in the repo and reverse repo rates, in addition to raising cash reserve requirements further over the forecast period.