A high-powered panel of the Bangladesh Bank (BB) decided to maintain the policy rate at 10 percent until the inflation comes down to a desired level and also spoke about moving away from the crawling peg and letting market forces determine the US dollar exchange rate.
Bangladesh Bank Governor Ahsan H Mansur said tightening monetary policy is the only globally practised remedy to heal inflationary pain, as businessmen opposed interest rate hikes for obstructing business expansion and job creation.
Inflationary pressure is being felt severely in the face of wage growth declines.
The target for January-June was 10%
The crawling peg and the mid-rate were introduced on May 8 this year
Kept repo rate at 8.5%, SDF rate at 7% and SLF rate at 10%
The central bank is expected to maintain a tight monetary stance for July-December
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’s $4.5 billion loan programme with the International Monetary Fund is expected to get the final approval on January 30, said the lender’s visiting top official yesterday.
Bangladesh Bank yesterday unveiled a wishy-washy monetary policy for the next six months that will prove to be ineffective in tackling the headwinds passing through the economy.
The Bangladesh Bank today raised its domestic credit growth target by 30 basis points to 18.5 per cent for the second half of 2022-23 in order to allow higher government expenditures.
Bangladesh Bank today said it would pursue a cautiously accommodative policy stance in the second half of the current fiscal year to contain inflationary and exchange rate pressures.
Bangladesh Bank today relaxed the lending rate cap for consumer loans, allowing banks to hike it up to 3 percentage points from the current level.
Bangladesh Bank has raised its policy rates by 25 basis points as it unveiled the monetary policy for the second half of the ongoing fiscal year.
Bangladesh Bank is going to unveil the monetary policy for the January-June period of the fiscal year 2022-23 this afternoon and return to the half-yearly policy after discontinuing it for three years.
Bangladesh’s trade deficit is projected to be $33 billion in the outgoing fiscal year as export earnings and remittances continue to fall below the overall import cost, said Bangladesh Bank in its monetary policy for the next fiscal year.
There have to be exchange rate and interest rate flexibilities in order to make the monetary policy of the Bangladesh Bank effective, said Zahid Hussain, a noted economist.
The central bank of Bangladesh will have to use the monetary policy to stabilise the foreign exchange market to pave the way for curbing inflation through demand management, said Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh.
