Economic Reporter :
The Business Initiative Leading Developme nt (BUILD) has urged the Bangladesh Bank (BB) to support to the country’s service sector.
In a statement, it said for the first time, yearly Monetary Policy Statement (MPS) has been announced electronically for FY 2021-22 which is an expansionary and accommodative policy with some specific steps to mitigate the damages done in the economy by the COVID-19.
Considering COVID situation and lack of assertiveness of businesses in investment, MPS targeted for private sector credit growth at 11 per cent and 14.8 percent for the first and second half of FY 2022, while public sector credit growth target is 30.6 per cent and 32.6 percent respectively.
Due to COVID, there has already been a significant negative impact on employment. Lower interest in credit growth in the private sector could have further impact on employment situation in the country.
A significant share of micro, cottage and small entrepreneurs are informal businesses that are suffering because of the small amount of monetary support. Bangladesh Bank’s policies to support these segments need to be more comprehensive.
The Credit Guarantee Schemes for immediate rescue of CMSMEs. Government may announce a specific 2nd round of SPs with an allowance for new employment as well as retention of employment for encouraging investors.
While there is a huge amount of liquidity in the Banks, there could be a good use of this liquidity in the areas so that velocity of money increases.
The trade balance shows adverse trend as it has been widened around USD 3.2bn than the previous fiscal year.
This is alarming as over the last five months import remained stuck due to market shock. It should concentrate on policy support to service export which may help to keep the trade balance favourable, the BUILD said.
