New monetary policy aims at increasing credit inflow

Bangladesh Bank has set a goal in its new monetary policy to increase the flow of credit into the private sector and boost investments.

The growth of credit influx was set at 16.5 percent for the first quarter (July-Sept) of the ongoing 2016-17 fiscal.

The target will be increased to 16.6 percent in the next policy for January to June, said Bangladesh Bank Governor Fazle Kabir.

The new monetary policy was announced on Tuesday. Kabir described it as being ‘measured, accommodative and inclusive’.

“This will work to preserve the continuation of environment-friendly policy and funding,” he said.

The target for increasing loan for the private sector in the last quarter of the previous fiscal, which ended on Jun 30, was set at 14.8 percent.

Until May, 16.40 percent growth was achieved, according to the central bank.

This is Kabir’s first policy after he took helm in March.

“The policy’s main aim is to contain and stabilise inflation besides helping the government in achieving growth that is sustainable, inclusive and environment friendly,” he said.    

GDP growth goal for the new fiscal was set at 7.2 percent. The government is hoping to contain average inflation at 5.8 percent.

Average inflation was at 5.92 percent in the 2015-16 fiscal, according to the Bangladesh Bureau of Statistics.

The central bank announces two monetary policies for every fiscal to steer in the right direction the government’s monetary policy to implement the new budget.

It will announce its next policy in June, at the end of the July-December term.