NEWS reports mentioned that the central bank said it would go on with a cautious stance to ensure macroeconomic stability and contain government borrowing and inflationary pressure as it unveiled its new monetary policy on Monday. The new monetary policy for the second half of the current fiscal year will boost investments and business activities that were severely hurt by political unrest in the past few months, Bangladesh Bank said on Monday according to reports. As per the reports BB Chief Economist Hassan Zaman said the monetary policy framework seeks to reduce inflation while at the same time leaves sufficient space for a recovery in credit demand in the second half. He is also said to have quoted “In addition, we are using macro-prudential and other policies to provide various temporary breaks to the businesses affected by the disruptions of the last few months so that the growth momentum can resume.” The Policy Statement also mentioned, the BB will use both monetary and financial sector policy instruments to achieve its goal on inflation as well as ensure credit growth which is sufficient to stimulate inclusive economic growth. “The central bank would target bringing down the average inflation rate to 7 percent.” While the basic aims of the policy remain the stimulation of growth of the macroeconomy and the controlling of inflation, it remains to be seen how far the Bank would be able to stimulate such growth while maintain inflation. The policy is cautious, as there was a pressure to cut interest rates to stimulate aggregate demand, but the main reasons for declines in investment remain the uncertainty of the political situation alongwith a lack of confidence. The policy remains responsible in that it has given an emphasis on keeping public sector borrowing within limits but is also simultaneously constructive because it has kept policy space in case the demand for credit in the private sector goes up. Ultimately no matter how responsible, constructive, or cautious the policy is it is entirely dependent upon the political climate as firms are cautious of investment as the ongoing political situation renders the investment climate uncertain due to the lack of confidence among the firms that the domestic political situation will improve in the near future. This remains the crux of the matter—it is politics which drives the economy, and not the other way around. What people think and feel remain a major part of economics-both at the production and distribution side and it is highly unlikely to be affected by any changes, or the lack of, in monetary policy. All agents of economic change have adopted a wait and see approach-at least for the short-term future, and the future remains undefinable.