"The lending rate for productive sector will not increase," a senior official who attended the meeting told the news agency.

Finance Adviser Dr Mirza Azizul Islam chaired the meeting of the Coordination Council on Monetary and Exchange Rate Policies at the Ministry of Finance on Monday.

Bangladesh Bank Governor Dr Salehuddin Ahmed, Finance Secretary Dr Mohammed Tareq, NBR chairman Badiur Rahman and senior officials concerned were present.

Earlier, on July 14, Bangladesh Bank announced a "cautious monetary policy stance" for the first half of the current fiscal year.

According to the policy stance, the policy rates - repo, reverse repo and treasury bonds - as well as commercial banks' mandatory reserve requirements (SLR and CRR) with the central bank would be increased.

Trade bodies and analysts apprehended that the "tight monetary policy stance" would push up the interest rates, affecting private sector lending.

The decision at the day's meeting followed Bangladesh Bank Governor Dr Salehuddin Ahmed's assurance on Saturday that the interest on bank loans, particularly long-term ones, would not increase as a consequence of the monetary policy.

The central bank's monetary policy stance was taken in the backdrop of rising money supply and reserve money despite cautious monetary policy over the last 18 months.

Money supply increased 19 percent in the last fiscal year, far more than the central bank's expectation of about 15 percent. The reserve money also increased significantly, with around Tk 10,000 crore as surplus liquidity in the banking system.

Meeting sources said the high-powered meeting, however, stressed the need for holding back the growth in money supply as well as reducing the extent of excess liquidity from the money market to curb inflation.

The strategy is unlikely to affect the private sector growth, said an official.