UNB, Dhaka :
Bangladesh Bank on Tuesday unveiled the first half-year monetary policy statement (MPS) focusing on continuation of required support for attaining targeted GDP growth and restraining the inflation.
“We have to pursue the MPS with a cautionary outlook focusing on GDP growth and restrained inflation”, Bangladesh Bank governor Fazle Kabir said while announcing the MPS July-December 2018.
The central bank came out with the new MPS ahead of the coming general election scheduled for December-January when economists apprehend a huge money circulation in the market to push up inflation and also increase in money laundering.
In the MPS, the central bank supported the move by bank owners to set the single digit interest rate in bank loans, but it found the huge default loans as the main obstacle to achieve its sustainability. The MPS set the internal credit growth target at 15.9 percent in 2018-19 against existing growth of 14.6 percent in the last fiscal (2017-18).
Of this, the public sector credit growth was targeted to be 10.4 percent and private sector at 16.8 percent.
“But there will be a room for accommodating any further rise in private credit growth as the public sector credit demand is lower,” said the central bank governor.
He noted that the growth in the broad money circulation was estimated to be 12 percent against its last year’s single digit growth in this regard.
Making a call to National Board of Revenue (NBR) and Commerce Ministry to enhance their monitoring to check the import of luxury and unnecessary items, the Bangladesh Bank governor said intense monitoring is required to ensure the private sector credit will be utilized for productive sectors and employment generating purposes.
Bangladesh Bank on Tuesday unveiled the first half-year monetary policy statement (MPS) focusing on continuation of required support for attaining targeted GDP growth and restraining the inflation.
“We have to pursue the MPS with a cautionary outlook focusing on GDP growth and restrained inflation”, Bangladesh Bank governor Fazle Kabir said while announcing the MPS July-December 2018.
The central bank came out with the new MPS ahead of the coming general election scheduled for December-January when economists apprehend a huge money circulation in the market to push up inflation and also increase in money laundering.
In the MPS, the central bank supported the move by bank owners to set the single digit interest rate in bank loans, but it found the huge default loans as the main obstacle to achieve its sustainability. The MPS set the internal credit growth target at 15.9 percent in 2018-19 against existing growth of 14.6 percent in the last fiscal (2017-18).
Of this, the public sector credit growth was targeted to be 10.4 percent and private sector at 16.8 percent.
“But there will be a room for accommodating any further rise in private credit growth as the public sector credit demand is lower,” said the central bank governor.
He noted that the growth in the broad money circulation was estimated to be 12 percent against its last year’s single digit growth in this regard.
Making a call to National Board of Revenue (NBR) and Commerce Ministry to enhance their monitoring to check the import of luxury and unnecessary items, the Bangladesh Bank governor said intense monitoring is required to ensure the private sector credit will be utilized for productive sectors and employment generating purposes.
