Bangladesh has formed a new wage board to review the minimum wage for garment workers, as protests disrupted key industrial hubs around the capital, Dhaka.

Despite the announcement on Sunday, thousands of workers continued demonstrating in the streets. Police fired tear gas and sound grenades as clashes were reported across protest sites.

Workers are demanding a minimum monthly wage of 30,000 taka ($242), more than double the current rate of 12,500 taka ($101). They say rising costs of food, housing, transport and healthcare have sharply eroded their purchasing power.

The six-member wage board will include representatives of the government, workers and factory owners. It is tasked with determining a new minimum wage for the sector.

"The issue of forming the wage board has been resolved. There will be no more problems now," Ministry of Labour and Employment adviser M Sakhawat Hossain Chowdhury told reporters.

"The workers should return to work and work smoothly," he added.

Labour and Employment Minister Ariful Haque Chowdhury warned that prolonged factory closures and production disruptions could delay export shipments and payments from international buyers, creating further difficulties for both manufacturers and workers.

The protests began on Saturday and prompted around 30 garment factories on the outskirts of Dhaka to declare holidays, according to Mohammad Mominul Islam Bhuiyan, superintendent of the Ashulia Industrial Police. Clashes in Ashulia injured several people, including police officers.

Bangladesh's garment sector is the world's largest after China's, employing millions of workers and contributing approximately 10 percent of the country's gross domestic product. It generates the bulk of Bangladesh's foreign earnings.

Manufacturers said the sector is facing mounting challenges, including rising production costs, periodic gas and electricity shortages, and uncertainty in energy markets.