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
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.
