Stocks drop as BB hiked to 10%
During the same time, prices of 217 companies declined, while 61 companies' share prices remained unchanged
Stocks dropped on Wednesday as borrowing costs could rise after the central bank raised its policy rate to 10%.
On Tuesday, the Bangladesh Bank raised its policy rate once again in less than a month, pushing it to 10% to make money costlier further to tame the high inflation.
This is the fifth hike this year and 11th since May 2022 when the policy rate — a key monetary tool to keep the money supply in check — was 5%. Earlier on 24 September, it rose from 9% to 9.5%.
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On Wednesday, the benchmark index DSEX dropped 71 points to close at 5,169, while the blue-chip index DS30 fell by 31 points to 1,892.
The turnover value also fell by 10% to Tk321 crore as investors' participation remained sluggish.
During the session, 52 issues advanced, while 306 declined and 41 remained unchanged.
Market insiders indicated that the policy rate hike is likely to drive deposit rates higher, encouraging investors to favour fixed deposits over investments in the capital market. Additionally, rising yields in government securities have further drained liquidity from the capital market.
