Dhaka, Bangladesh (BBN)– Bangladesh Bank (BB) will continue its ‘cautious’ and ‘investment-friendly’ monetary policy for the second half (H2) of the ongoing fiscal year (FY) 2014-15 with an aim to achieve maximum economic growth by curbing inflationary pressure on the economy.
“The cautiously restrained monetary policy stance of H1 FY 2015 will remain unchanged in H2 FY 15, without any new loosening or tightening,” BB Governor Atiur Rahman said while formally announcing the monetary polity statement (MPS) at a press conference held at the central bank headquarters in Dhaka.
The central bank governor the H2 of FY 15 monetary programme drawn up on this basis will seek to limit FY 15 broad money (M2) growth at 16.5 percent, using controls on BB’s reserve money growth as the main tool.
“Private sector credit will have space for 15.5 percent growth, a level substantially higher than the 12.7 percent November 2014 level,” he noted.
Besides maintaining continuity in monetary policy stance, the central bank will also maintain continuity and further strengthen the momentum of investment friendly reforms in the credit and financial policies accompanying the monetary policies in the H2 of FY2015; towards enhancing effectiveness of the financial markets as transmission channels for monetary policies, the BB governor noted.
Mentioning satisfactory level of different economic indicators including growth, exchange rate and inflation, Dr. Rahman said the welcome trend of recovery in momentum of investment and output
activities in the H1 of FY 15 strengthened optimism of FY 15 GDP growth significantly exceeding the earlier projections (6.5-6.8 percent) based on time series trend analyses.
“Unfortunately, disruptions from political unrest have reemerged, casting shadow on such expectations,” he said.
He also said even as Bangladesh economy’s resilience against debacles is well known, overcoming from the now prevailing disruptive situation is of extreme urgency for protecting the momentum of growth and poverty decline. “I earnestly hope that peace and calm will return soon, enabling realization of the growth prospects projected earlier.”
BB Change Management Advisor Allah Malik Kazemi, Deputy Governor SK Sur Chowdhury and Chief Economist Biru Pakska Paul also spoke on the occasion.
BBN/SSR/AD-29Jan15-5:15 pm (BST)
