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
The BB maintained a contractionary policy stance in the July-December of 2023-24
The Federal Reserve of the US and the European Central Bank kept hiking policy rates in their fight against record inflation throughout last year and this year whereas the central bank of Bangladesh chose not to use the full force of the monetary policy.
While the government’s latest monetary policy for the first half of fiscal year 2023-24 shows an attempt to be rational for the market, it lacks vigour to solve inflation and the dollar crisis.
Like in the outgoing financial year, the common people in Bangladesh will continue to suffer from higher consumer prices in 2023-24 as the factors behind the elevated level of inflation are unlikely to change dramatically.
On the surface, the monetary policy appears to be tuned to the need of the hour: bring down inflation and conserve reserves. But it comes caving down on careful reading.
The Bangladesh Bank has decided to increase the policy rate
The Bangladesh Bank may today raise its key interest rates to tame inflationary pressure but the attempt might go in vain since the monetary authority may not withdraw the interest rate cap on loans in a true sense.
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.
The central bank yesterday unveiled a cautiously optimistic monetary policy for the second half of the fiscal year, keeping room to provide adequate supply of quality credit to support the growth and inflation targets.
Bangladesh Bank announces its new monetary policy for January-June with a target to tighten money supply and curb excessive lending.
In Fiscal Year (FY) 2014-15, global sovereign rating agencies Moody's, Standard & Poor's and Fitch assigned Bangladesh a 'stable' sovereign credit outlook.
If monetary policy autonomy is a priority, capital account liberalisation should come after a country’s transition to a flexible exchange rate – not before it.
Bangladesh Bank recently announced its monetary policy for the fiscal year 2016. As always, the announcement has sparked a number of criticisms.
Bangladesh Bank announces its monetary policy for the first half of the current fiscal year, keeping policy rates unchanged.
The monetary policy for the fiscal year 2016 is coming soon. Its arrival in the wake of the recently announced budget will build the bridge between the Ministry of Finance and Bangladesh Bank, heralding coordination between fiscal and monetary policies.