BB to unveil monetary policy on quarterly basis

Bangladesh Bank (BB) has decided to issue its Monetary Policy Statement (MPS) on a quarterly basis, replacing the current six-month cycle, in an effort to make monetary policy more responsive to rapidly changing domestic and global economic conditions.

The central bank is expected to implement the new system from September. Officials said the move is intended to make the MPS more realistic, timely, and inclusive, as macroeconomic developments have become increasingly volatile.

Bangladesh Bank had introduced an annual MPS during the tenure of former Governor Fazle Kabir. The frequency was later revised to a half-yearly schedule under former Governor Abdur Rouf Talukder.

The International Monetary Fund (IMF) had also recommended more than a year ago that Bangladesh Bank adopt a quarterly MPS framework to improve policy responsiveness and strengthen monetary management.

The proposal was recently discussed at a meeting of the relevant parliamentary standing committee, which endorsed the initiative, paving the way for the central bank to formally introduce quarterly monetary policy statements from September next.

A monetary policy statement is an official document released by a central bank that outlines its economic stance, inflation targets, and key interest rates to manage the money supply.

Seeking anonymity, a BB official said they decided to issue MPS on a quarterly basis probably from September next. "We are planning to issue a press release very soon to update our stakeholders," he said.

The central banker said the monetary policy committee normally meets in every three months to assess global and domestic macroeconomic indicators before making any adjustment for betterment of the money market.

He said the IMF earlier as part of its 4.70 billion US dollar lending package recommended the banking regulator to go for quarterly issuance of MPS replacing the existing six-month ones.

It is known that the BB has already been analysing MPS of its peer countries to make it a better one.

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