Special Correspondent :
Bangladesh Bank (BB) will adopt an ‘expansive’ monetary policy for the second half (H2) of the current fiscal year amid a slowing credit growth to the private sector.
For the last couple of years, it perused a ‘restrained’ monetary policy having flexibility to provide liquidity at adequate levels to the market for maintaining a reasonable growth of credit to private sector as well as preventing unnecessary credit flow to non-productive economic sectors.
“BB is going to take up an expansive monetary policy this time after it finds further room for credit expansion to private sector,” a senior BB official told The New Nation on Friday, preferring anonymity.
He said credit growth in private sector slightly missed the target reflecting lesser credit accommodation by the businesses. But the growth was satisfactory if we consider the prevailing macro-economic situation in the country.
Governor Dr Fazle Kabir will unveil the monetary policy statement for the January-June period of the current fiscal on Sunday through a media briefing at the BB headquarters in the capital.
“The new monetary policy will take a soft stance over fixing the private sector credit growth target which may go up from that of previous one’s,” said the BB official adding, “The ceiling for private sector credit growth may go up to accommodate any substantial rise in investment and trade-finance over the next six months.”
He also said the BB policymakers are hopeful of witnessing a fresh credit boost to private sector as the investment climate is very favourable in the country.
Private sector credit growth stood at 15.20 per cent up to December 2016 as against the target of 16.5 per cent set by the Central Bank in its previous monetary policy (July-June).
The BB official said the new monetary policy will be framed bringing a balance between the government’s fiscal policy and economic growth. The policy will focus on taming inflation and achieving an inclusive economic growth.
“An increased market monetization is imperative when credit flow to the private sector remained below to the target,” Dr Zahid Hussain, the lead economist, the World Bank’s Bangladesh Country Office, told The New Nation on Friday.
He said, “It is necessary to boost the investment as well as accelerate the GDP growth”.
The WB economist further said the overall investment both public and private sector remained well-below from the government’s target taking a heat from the energy crisis, infrastructure deficiencies and lack of structural reforms.
Bangladesh Bank (BB) will adopt an ‘expansive’ monetary policy for the second half (H2) of the current fiscal year amid a slowing credit growth to the private sector.
For the last couple of years, it perused a ‘restrained’ monetary policy having flexibility to provide liquidity at adequate levels to the market for maintaining a reasonable growth of credit to private sector as well as preventing unnecessary credit flow to non-productive economic sectors.
“BB is going to take up an expansive monetary policy this time after it finds further room for credit expansion to private sector,” a senior BB official told The New Nation on Friday, preferring anonymity.
He said credit growth in private sector slightly missed the target reflecting lesser credit accommodation by the businesses. But the growth was satisfactory if we consider the prevailing macro-economic situation in the country.
Governor Dr Fazle Kabir will unveil the monetary policy statement for the January-June period of the current fiscal on Sunday through a media briefing at the BB headquarters in the capital.
“The new monetary policy will take a soft stance over fixing the private sector credit growth target which may go up from that of previous one’s,” said the BB official adding, “The ceiling for private sector credit growth may go up to accommodate any substantial rise in investment and trade-finance over the next six months.”
He also said the BB policymakers are hopeful of witnessing a fresh credit boost to private sector as the investment climate is very favourable in the country.
Private sector credit growth stood at 15.20 per cent up to December 2016 as against the target of 16.5 per cent set by the Central Bank in its previous monetary policy (July-June).
The BB official said the new monetary policy will be framed bringing a balance between the government’s fiscal policy and economic growth. The policy will focus on taming inflation and achieving an inclusive economic growth.
“An increased market monetization is imperative when credit flow to the private sector remained below to the target,” Dr Zahid Hussain, the lead economist, the World Bank’s Bangladesh Country Office, told The New Nation on Friday.
He said, “It is necessary to boost the investment as well as accelerate the GDP growth”.
The WB economist further said the overall investment both public and private sector remained well-below from the government’s target taking a heat from the energy crisis, infrastructure deficiencies and lack of structural reforms.
