Friday, August 18, 2017

Bangladesh to have new monetary policy aimed at boosting investment

  • Chief Economics Correspondent, bdnews24.com
    Published: 2017-07-24 23:29:29 BdST

bdnews24

The Bangladesh Bank is set to roll out on Wednesday a monetary policy for the first half (July-December) of the FY 2017-18 aimed at boosting investment and keeping inflation under control.

Governor Fazle Kabir will announce the new policy at 11am, the central bank’s spokesperson Subhankar Saha told bdnews24.com on Monday.

It will not be ‘very different’ from the last monetary policy but a ‘cautious one’, he said. “While priority will be given to keeping inflation under control, private sector credit flow will be maintained to achieve the desired growth.”

A central bank official, asking not to be named, told bdnews24.com that the private sector credit growth target could be set at 17 percent in the new policy.

In the previous one, meant for January-June period of the last fiscal, Bangladesh Bank had set the private sector credit growth target at 16.5 percent.

Until May, according to latest data, the credit growth based on that policy was at 16.3 percent.

Subhankar Saha called the last monetary policy a ‘successful one’ and said inflation rate was also lower while the GDP growth target had crossed the target.

“That’s why, like the previous one, the new policy’s main goal will be meeting the GDP growth target by boosting investment.”

In the budget for the 2017-18 financial year, the GDP growth target has been set at 7.4 percent. The government also plans to keep the average inflation rate at 5.5 percent.

According to Bangladesh Bureau of Statistics or BBS, the overall inflation rate was at 5.94 percent on a point-to-point basis in June. The average inflation rate was 5.44 percent.

BBS data also said that Bangladesh’s GDP growth rate was at 7.24 percent at the end of FY2016-17, meeting the target set in the budget for that fiscal.

The Bangladesh Bank makes two monetary policy announcements each year to guide the implementation of the government’s budget and economic policy.

It meets with economists, businessmen, bankers and other civil society representatives before announcing its monetary policy.