Announcement of the monetary policy statement (MPS) for the second half of this financial year this month remains cloaked in uncertainty probably because of unavailability of updated data on key macroeconomic indicators.
As a matter of fact, Wednesday's board meeting of the central bank was supposed to approve the drafted MPS, but was already postponed, in an indication for further delay in unveiling the key document for the country's finance and economy.
With the postponement, the scheduled MPS-announcement programme set for January 27th becomes largely uncertain, according to officials.
Even on Monday last, the 7-member monetary policy committee (MPC) headed by the central bank governor Dr Ahsan H. Mansur sat among themselves to take key decisions over policy rate, private-sector- credit growth and money supply, but the meeting ended without any concrete decision.
Later, the committee asked its members to give their opinions "as quickly as possible" for finalising the document.
Bangladesh Bank (BB), the country's central bank, traditionally announces monetary policy statement in January, be it annual or half-yearly. If this MPS-unveiling programme is deferred until next month -February--it will be the first time its history is broken.
Monetary policy is one of the most important macroeconomic instruments through which the central bank ensures price stability by controlling the overall money supply, promote economic growth and employ strategies such as revising interest rates and changing bank reserve requirements.
Seeking anonymity, a BB official says the BB has postponed its Wednesday's board meeting because of latest data unavailability and it might shift to early next month.
"So the scheduled MPS-unveiling event is probably not taking place this month," says the official about the dilemmas.
Regarding the reasons, the central banker says they haven't got the latest data on money supply, foreign-exchange (forex) market and December's BoP (balance of payments) which are essentials before taking any decision.
Former lead economist in World Bank's Dhaka Office Dr Zahid Hossain notes the banking regulator was seen in the past release MPS riding on backdated data though the banking regulator preserves all forms of data on a regular basis, which needs to be aggregated.
"So, data-lacking is not a valid reason. I think the real reason must be disagreement probably on some issues among the MPC members," he says. If the BB declares MPS in February, he adds, it means the regulator will give MPS for five months, not six months. The policy is supposed to be forward-looking, not backward-looking.
Asked whether the BB is waiting for January's inflation figure which is expected to be decline because of huge winter harvests before taking any decision, the noted economist said the central bank can disclose policy rule in the MPS.
In the policy rule, there will be clear indication that the policy rate will be adjusted based on the nature of inflation movement, he added.
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