Dhaka, Bangladesh (BBN)- The central bank of Bangladesh unveiled a growth supporting monetary policy Wednesday aiming to ensure adequate credit to the private sector particularly for productive ones for achieving inclusive economic growth.
“We hope that credit to the private sector is envisaged to remain at a healthy 18 per cent, above other countries in the region, and enough to accommodate the FY’13 gross domestic product (GDP) growth targets,” Bangladesh Bank (BB) Governor Atiur Rahman told the newsmen at the central bank while announcing the monetary policy statement (MPS) for the July-December period of the FY’13.
The BB has fixed private sector credit growth at 18.3 percent for the first half of the FY’13 while 18 per cent has been set for the January-June period of the same fiscal, according to the MPS.
The private sector credit growth target was 16 per cent for the January-June period of the FY’12.
The central bank has also set a monetary programme aiming to bring down inflation to 7.5 per cent by the end of this fiscal from the current level at 10.62 per cent through discouraging credit flow to unproductive sectors.
“It’s a main challenge for the current MPS to bring down inflation to 7.5 per cent in line with the existing budgetary target,” the central bank chief said, adding that discouraging credit flow to the unproductive sectors will be continued.
Regarding the revised loan classification and provisioning guidelines, Dr. Rahman said the banks will have to implement these by the first half of FY’13, and while these may make a one-off difference to bank profitability they will not affect access to credit.
“This monetary policy stance also aims to preserve the country’s prevailing external sector stability,” he said, adding that the BB will continue to support a market-based exchange rate while seeking to avoid excessive foreign exchange rate volatility.
BBN/SSR/AD-18July12-3:05 pm (BST)
