Dhaka, Bangladesh (BBN) – The central bank of Bangladeshis set to unveil its second-half (H2) yearly monetary policy on Sunday aiming to achieve maximum economic growth through boosting investment particularly in productive sectors.
Bangladesh Bank (BB) Governor Fazle Kabir will announce the monetary policy statement (MPS) at 11 am on the day for the January-June period of the current fiscal year (FY) 2016-17 to help real sectors for achieving sustainable economic growth with curbing inflation.
Talking to BBN in Dhaka, a senior official of the BB said the central bank is expected to announce a ‘growth-supportive’ MPS giving top priority to facilitate investment through increasing credit flow particularly in the real economic sectors.
He also said the central bank will facilitate credit flow to the productive sectors for achieving 7.2 per cent GDP (gross domestic product) growth by the end of this fiscal.
The BB’s latest moves came against the backdrop of lower growth of the private sector credit than target, set by it in the monetary policy, for the July-December period of the ongoing fiscal year (FY).
The growth in credit flow to private sector came down to 15.01 per cent in November 2016 on a year-on-year basis from 15.20 per cent a month ago. It was 15.34 per cent in September 2016.
The central banker expected that the private sector credit growth may reach at around 15.50 per cent in December last.
“But the target may be achievable by the end of June 2017,” he noted.
The central bank had projected that private-sector credit would grow at 16.60 per cent in December 2016 and 16.50 per cent in June 2017 respectively.
The central banker believed that the credit flow may pick up from the month of March 2017 that would be continued by the end of the FY 2016-17.
“The implementation of annual development progamme (ADB) normally expedite during the April-June period of each fiscal,” another BB official explained.
Existing liquidity situation, movement of stock market and exchange rate position will be included in the MPS, according to the central banker.
Besides, the declining trend of inward remittances and rising trend of fuel oils other essential commodities prices in the global market will be focused in the MPS.
“We’re not worried right now about inflationary pressure on the economy,” the BB official said while replying to a query.
Bangladesh’s average inflation as measured by consumers’ price index (CPI) came down to 5.52 per cent in December last from 5.60 per cent of the previous month while point-to-point inflation rate also fell to 5.03 per cent, the lowest in 53 months, from 5.38 per cent in November 2016.
The government as well as the central bank had set the inflation target at 5.8 per cent for the FY 17.
The central bank, however, has already taken measures to check any possible medium-term impact on inflation, the BB official hinted.