Business Desk :
Bangladesh Bank Governor Dr. Atiur Rahman spoke on “Unwinding of unconventional monetary policies of Advanced Economies (AEs) and its impact on emerging market economies (EMEs)” in the 28th SAARCFINANCE Governors’ Symposium in Colombo on 24 July 2014 following a keynote address by Dr. Raguram Rajan, Governor of RBI. Governor Rahman mentioned that the Quantitative Easing (QE) of AEs pumping huge liquidity broadened access of EMEs to low cost financing in convertible currencies, its unwinding by phased tapering creates the exactly opposite situation for the emerging and developing economies of reduction and reversal of fund inflows creating disruptions for investment activities, currency stability and so forth. He dwelt upon the coping strategies that EMEs and developing economies can adopt unilaterally, regionally and in global forums. These include (1) EMEs’ collective effort in pressing the IMF, WB, ADB and other supranational financial institutions to line up adequate financing for EMEs to substitute for withdrawals caused by QE phase out; (2) EMEs using part of their high foreign exchange reserves in setting up new regional financial institutions, like the one already initiated by the BRICS; (3) EME central banks entering into mutual support SWAP lines, as introduced by ASEAN+3 member country central banks, and recently by South Asian central banks in their SAARCFINANCE forum.
Referring to the experience of Bangladesh economy, Dr. Rahman added that maintaining effective grip on short term hot money inflows and outflows paid well in keeping growth momentum with macroeconomic stability for Bangladesh. Bangladesh economy has been doing well in many fronts including sustained growth of over 6.0% and improvement in other major indicators like, fiscal deficit, current account balance, export, import, and so forth. He further added that BB’s financial inclusion drive has played important role in all these achievements. He suggested that smaller South Asian EMEs like Bangladesh would be well advised to maintain more guarded stance in widening their openness to footloose short term capital flows, to limit exposure to destabilization risks from negative spillovers of unwinding of QE and other unconventional monetary policies pursued by AEs.
Bangladesh Bank Governor Dr. Atiur Rahman spoke on “Unwinding of unconventional monetary policies of Advanced Economies (AEs) and its impact on emerging market economies (EMEs)” in the 28th SAARCFINANCE Governors’ Symposium in Colombo on 24 July 2014 following a keynote address by Dr. Raguram Rajan, Governor of RBI. Governor Rahman mentioned that the Quantitative Easing (QE) of AEs pumping huge liquidity broadened access of EMEs to low cost financing in convertible currencies, its unwinding by phased tapering creates the exactly opposite situation for the emerging and developing economies of reduction and reversal of fund inflows creating disruptions for investment activities, currency stability and so forth. He dwelt upon the coping strategies that EMEs and developing economies can adopt unilaterally, regionally and in global forums. These include (1) EMEs’ collective effort in pressing the IMF, WB, ADB and other supranational financial institutions to line up adequate financing for EMEs to substitute for withdrawals caused by QE phase out; (2) EMEs using part of their high foreign exchange reserves in setting up new regional financial institutions, like the one already initiated by the BRICS; (3) EME central banks entering into mutual support SWAP lines, as introduced by ASEAN+3 member country central banks, and recently by South Asian central banks in their SAARCFINANCE forum.
Referring to the experience of Bangladesh economy, Dr. Rahman added that maintaining effective grip on short term hot money inflows and outflows paid well in keeping growth momentum with macroeconomic stability for Bangladesh. Bangladesh economy has been doing well in many fronts including sustained growth of over 6.0% and improvement in other major indicators like, fiscal deficit, current account balance, export, import, and so forth. He further added that BB’s financial inclusion drive has played important role in all these achievements. He suggested that smaller South Asian EMEs like Bangladesh would be well advised to maintain more guarded stance in widening their openness to footloose short term capital flows, to limit exposure to destabilization risks from negative spillovers of unwinding of QE and other unconventional monetary policies pursued by AEs.
