Economic Reporter :
Bangladesh Bank (BB) is set to announce its flagship Monetary Policy Statement (MPS) today (Wednesday) for the first half of the current 2019-20 financial year (FY20).
“BB Governor Fazle Kabir will unveil the MPS today at 11.30am at a press conference at the central bank headquarters in Motijheel here,” said a BB press release on Tuesday.
Earlier, a senior official of the central bank said the MPS would be announced on the basis of the national budget for the 2019-20 financial year and the fiscal policy directions.
Like previous fiscal, the central bank will maintain its cautionary stance in the new MPS, he added.
In FY19, average annual point-to-point inflation had dropped to 5.48 per cent against the target of containing the rate within 5.6 per cent in the fiscal. The target was 5.78 per cent in FY18.
The country achieved 8.13 per cent GDP growth in FY19 against the target of 7.8 per cent.
The central bank would announce the MPS when the country’s private sector credit growth witnessed a sharp fall and the country’s scheduled banks, especially the private commercial ones, were struggling to mobilise deposits.
Due to the liquidity crisis in the country’s banking sector, private sector credit growth dropped to six-year low at 11.29 per cent in June this year against the central bank’s MPS forecast for achieving 16.5 per cent growth in the second half of FY19.
Although the BB governor, while unveiling the January-June MPS of FY19, expected that the private sector credit growth would increase gradually, the reality was different.
On the other hand, public sector credit growth rose to 19.15 per cent in June against the projection for 10.9 per cent during the January-June period amid government increased dependency on bank borrowing to meet up deficit financing for budget implementation.
Officials of the BB, in recent BB meeting held last week to discuss the MPS, have expressed different opinion on the MPS special on setting private sector credit growth projection.
A number of officials mentioned that the central bank should lower the private sector credit growth target from 16.5 per cent considering the lower achievement in the second half of FY19.
Bangladesh Bank (BB) is set to announce its flagship Monetary Policy Statement (MPS) today (Wednesday) for the first half of the current 2019-20 financial year (FY20).
“BB Governor Fazle Kabir will unveil the MPS today at 11.30am at a press conference at the central bank headquarters in Motijheel here,” said a BB press release on Tuesday.
Earlier, a senior official of the central bank said the MPS would be announced on the basis of the national budget for the 2019-20 financial year and the fiscal policy directions.
Like previous fiscal, the central bank will maintain its cautionary stance in the new MPS, he added.
In FY19, average annual point-to-point inflation had dropped to 5.48 per cent against the target of containing the rate within 5.6 per cent in the fiscal. The target was 5.78 per cent in FY18.
The country achieved 8.13 per cent GDP growth in FY19 against the target of 7.8 per cent.
The central bank would announce the MPS when the country’s private sector credit growth witnessed a sharp fall and the country’s scheduled banks, especially the private commercial ones, were struggling to mobilise deposits.
Due to the liquidity crisis in the country’s banking sector, private sector credit growth dropped to six-year low at 11.29 per cent in June this year against the central bank’s MPS forecast for achieving 16.5 per cent growth in the second half of FY19.
Although the BB governor, while unveiling the January-June MPS of FY19, expected that the private sector credit growth would increase gradually, the reality was different.
On the other hand, public sector credit growth rose to 19.15 per cent in June against the projection for 10.9 per cent during the January-June period amid government increased dependency on bank borrowing to meet up deficit financing for budget implementation.
Officials of the BB, in recent BB meeting held last week to discuss the MPS, have expressed different opinion on the MPS special on setting private sector credit growth projection.
A number of officials mentioned that the central bank should lower the private sector credit growth target from 16.5 per cent considering the lower achievement in the second half of FY19.
