New monetary policy on way

Bangladesh Bank has started discussions with experts, businesspeople and top government officials to work out a monetary policy for January-June 2013.

Published : 18 Jan 2013, 00:15 AM
Updated : 18 Jan 2013, 00:15 AM

The apex bank will organise three rounds of discussions, the first on Thursday evening chaired by its governor Atiur Rehman.

In the next two rounds , Bangladesh Bank officials will meet economists, its former governors, top-flight businesspersons, various associations of professionals and officials of relavant government departments.

The new monerary policy is expected to be announced on Jan 30.

Bangladesh Bank’s lead economist Hassan Zaman told that they will try working out the “most practical monetary policy” keeping national and global factors in mind..

BB monetary policy desk officials say they don’t expect much change from the current monetary policy.
They say the ruling Awami League government will want growth to continue and inflation to be controlled ahead of the parliament elections due within a year . “The new monetary policy will be growth friendly,” said one official.
This effectively means money will be provided for infrastructure and other productive sectors but liquidity will be controlled.
Inflation had increased marginally in last December, but the World Bank, International Monetary Fund (IMF) and other organisations have doubts whether Bangladesh can meet its growth targets.
Experts say rising inflation may make it difficult for a growth friendly monetary policy to play out.
The recent hike of fuel oil prices may push up transport and production costs and that will lead to more inflation, creating challenges for a growth-friendly monetary policy.
The government has set a target of 7.69 percent growth in the current fiscal year. In November, the rate was 7.41 percent.
In the Jul-Dec monetary policy, a target for increasing loans by 18.30 percent for the private sector to promote growth. At the end of the fiscal year, the rate will stand at 18 percent.
A top official of BB, seeking anonymity says he thinks the apex bank will not be able to match its previous achievements.
He says a decision has been taken to warn banks against no-holds-barred loan disbursement in the next bankers meeting.