Monetary policy body recast with externals coopted

Central bank's monetary-policy body is reconstituted with three external economists replacing as many deputy governors of the Bangladesh Bank, officials said, in a significant shakeup.

The major change to the key committee of the central bank, which also drops the financial-intelligence chief, comes under a recipe of modernisation of the country's monetary-policy framework. The recast was approved by the BB board in its latest meeting held Sunday.

As decided, the chairperson of the Economics department of Dhaka University, the director-general of Bangladesh Institute of Development Studies (BIDS) and another BB-board nominated economist from outside will be on the committee.

Seeking anonymity, a BB official said the new members will replace three deputy governors who are not in the charge of the Monetary Policy Department (MPD) of the central bank.

Also, the Bangladesh Financial Intelligence Unit (BFIU) chief was excluded from the policy body.

Under the revision, the central banker said, the BB governor will act as chief of the body while the deputy director dealing with the MPD, the chief economist of the central bank and the executive director (MPD) will represent from the BB on the committee.

"I think this is a good decision as we'll be able to get opinions of the external economists in taking any decision. It will also ensure transparency of the committee," the BB official said.

Money-market experts and economists have long demanded inclusion of experts from outside to ensure effective and inclusive policy decision to bring stability in the money market.

According to the BB, the monetary-policy committee is required to meet at least four times a year for making updates on the monetary policy in keeping with changing situations and scenarios.

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