Increasing policy interest rate to contain inflation likely to affect business and impact banking liquidity, according to two leaders of top chambers
Even though the challenges are pointed out in the MPS, they fall short of measures to yield visible results
The Bangladesh Bank unveiled its monetary policy for the second half of the current fiscal year, with the goal to tame runaway inflation, which has been a concern for the past two years. Here are the major points of this monetary policy, and how they might -- at least in theory -- ensure a smooth economic journey for Bangladesh over the next six months.
The central bank has rolled out a plan to introduce an interim crawling peg system for the taka to regulate abrupt fluctuations of its value, paving the way towards a fully flexible regime in the future.
The BB said Bangladesh's economic outlook remains positive despite the ongoing challenges
The peg system would be linked to a carefully selected basket of currencies and operate within a predefined exchange rate corridor
Bangladesh Bank also raised the benchmark policy rate by 25 basis points to 8 percent
Bangladesh Bank unveiled the monetary policy for the second half of the current fiscal year
The BB maintained a contractionary policy stance in the July-December of 2023-24
BB's adoption of crawling peg as per IMF prescription will possibly rule out a market-driven exchange rate, as suggested
Its a system of exchange rate adjustments in which a currency with a fixed exchange rate is allowed to fluctuate within a band of rates.
Even rate hikes cant tame a raging inflation, so what is the solution ?
