The central bank of Bangladesh. Photo: BBN

Dhaka, Bangladesh (BBN) – The central bank of Bangladeshis set to unveil its first-half (H1) yearly monetary policy on Wednesday 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 11:30 am on the day for the July-December period of the ongoing fiscal year (FY) 2017-18 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 has formulated the growth-supportive MPS giving top priority to creating more employment opportunities through boosting investment in the real economic sectors.
He also said the central bank will facilitate credit flow into the productive sectors as a measure for achieving 7.4 per cent GDP (gross domestic product) growth by the end of this fiscal.
“The policy rates are likely to remain unchanged in the upcoming MPS,” the central bankers hinted.
The latest position on stock market, foreign exchange and money-market situation will be included in the monetary policy, according to the BB officials.
They also said the BB may emphasise ensuring the quality of credits through strengthening monitoring and supervision by both the central bank and the commercial banks instead of enhancing the target of credit growth to the private sector.
The BB’s latest policy stance comes in the wake of possible rising trend in the inflationary pressure on the economy in the coming months, following higher prices of food, particularly rice, owing to floods, the central bankers explained.
Bangladesh’s inflation (on point-to-point basis), as measured by consumers’ price index (CPI), increased slightly in the month of March this year mainly because of rise in prices of both food and non-food items.
The inflation rose to 5.39 per cent in March from 5.31 per cent a month before, according to Bangladesh Bureau of Statistics (BBS) data.
Food inflation stood at 6.89 per cent and non-food inflation at 3.18 per cent in March as compared to 6.84 per cent and 3.07 per cent respectively in February.
On the other hand, the inflation came down to 5.39 per cent on annual-average basis in March this year from 5.41 per cent in February, the BBS data showed.
The government as well as the central bank had set the inflation target at 5.5 per cent for the FY 18.
They also said the BB may consider the upward trend in prices of petroleum products on the global market, declining trend in inward remittances, possible rising trend in inflation and ensuring proper use of credits in the next MPS.
“We expect that the central bank is likely to give more attention for boosting SMEs and agriculture loans along with micro-credit to create employment opportunities across the country,” another central banker noted.
He also said the private-sector-credit growth is still witnessing a high-level position considering the inflationary pressure on the economy.
The growth in credit flow to private sector came down to 16.03 per cent in May 2017 on a year-on-year basis from 16.21 per cent a month ago. It was 16.06 per cent in March 2017.
The last MPS for the second half of the last fiscal year had set a target for the private-sector-credit growth at 16.50 per cent at the end of June 2017.