BB's next half-yearly monetary policy to be 'accommodative'
Tuesday, 1 January 2008
Siddique Islam
The Bangladesh Bank (BB) is likely to announce a pro-growth monetary policy shortly aiming to bring dynamism in the overall economy, official sources said.
It is expected to be accommodative replacing the existing tightened monetary policy.
The central bank will make the move against the backdrop of recurrent floods and devastating cyclone Sidr that have severely affected the country's economic activities.
"We are designing the new monetary policy to facilitate overall economic activities under the present circumstances. The policy will also help achieve an optimum growth in the near future," a BB senior official told the FE Monday.
He also said the central bank would give special attention to credit flow in the productive sectors to lessen inflationary pressure.
The new monetary policy for the January-June period of this year will help achieve annual real gross domestic product (GDP) of 6.5 per cent for the current fiscal and keep the inflation under control.
"We are trying to curb inflationary pressure on economy through increasing our domestic production," another BB official told the FE, adding that the central bank will maintain such policy to help the productive sectors.
Meanwhile, the country's inflation as measured by overall consumers' price index (CPI) again crossed double digit and stood at 10.06 per cent on a point-to-point basis in October, 2007 from 9.60 per cent in September 2007 because of price escalation of both food and non-food items.
Besides, the inflation rate moved to 8.25 per cent in October last from 8.01 per cent of the previous month on an annual average basis, according to the data of the Bangladesh Bureau of Statistics (BBS).
In September 2007, the overall CPI came down to 9.60 per cent on a point-to-point basis from 10.12 per cent a month ago.
The rate of inflation concerning food items reached 11.73 per cent on a point-to-point basis in October, 2007 from 11.10 per cent in September 2007. This price rise has been attributed to both domestic and international factors.
On December 17 last, the BB asked the nationalised commercial banks, recently converted into public limited companies (PLCs), to allocate more funds to rehabilitate the cyclone-hit people in the country's south-western districts.
Besides, the central bank has already directed the banks for taking initiatives to achieve a minimum of 70 per cent to 80 per cent target of their farm credit disbursement by January 2008 in the cyclone-hit areas.
Sources, however, said the central bank will take initiatives to gear up activities in some real sectors including agriculture, small and medium enterprises (SME) in line with the fifth monetary policy to be released by January 12 next.
The central bank earlier asked the Plc banks and state-owned financial institutions to intensify disbursement of fresh farm loan along with rural credit to all sections of cyclone-affected people on easy terms and conditions.
Projections of different key macroeconomic indicators including credit growth in private and public sectors and overall money supply situation will be made in the policy, the sources added.
The first half-yearly monetary policy statement was issued on January 15, 2005, the second policy made public on July 13, 2006, the third policy released on January 14, 2007 and the fourth policy published on July 12 last.
The Bangladesh Bank (BB) is likely to announce a pro-growth monetary policy shortly aiming to bring dynamism in the overall economy, official sources said.
It is expected to be accommodative replacing the existing tightened monetary policy.
The central bank will make the move against the backdrop of recurrent floods and devastating cyclone Sidr that have severely affected the country's economic activities.
"We are designing the new monetary policy to facilitate overall economic activities under the present circumstances. The policy will also help achieve an optimum growth in the near future," a BB senior official told the FE Monday.
He also said the central bank would give special attention to credit flow in the productive sectors to lessen inflationary pressure.
The new monetary policy for the January-June period of this year will help achieve annual real gross domestic product (GDP) of 6.5 per cent for the current fiscal and keep the inflation under control.
"We are trying to curb inflationary pressure on economy through increasing our domestic production," another BB official told the FE, adding that the central bank will maintain such policy to help the productive sectors.
Meanwhile, the country's inflation as measured by overall consumers' price index (CPI) again crossed double digit and stood at 10.06 per cent on a point-to-point basis in October, 2007 from 9.60 per cent in September 2007 because of price escalation of both food and non-food items.
Besides, the inflation rate moved to 8.25 per cent in October last from 8.01 per cent of the previous month on an annual average basis, according to the data of the Bangladesh Bureau of Statistics (BBS).
In September 2007, the overall CPI came down to 9.60 per cent on a point-to-point basis from 10.12 per cent a month ago.
The rate of inflation concerning food items reached 11.73 per cent on a point-to-point basis in October, 2007 from 11.10 per cent in September 2007. This price rise has been attributed to both domestic and international factors.
On December 17 last, the BB asked the nationalised commercial banks, recently converted into public limited companies (PLCs), to allocate more funds to rehabilitate the cyclone-hit people in the country's south-western districts.
Besides, the central bank has already directed the banks for taking initiatives to achieve a minimum of 70 per cent to 80 per cent target of their farm credit disbursement by January 2008 in the cyclone-hit areas.
Sources, however, said the central bank will take initiatives to gear up activities in some real sectors including agriculture, small and medium enterprises (SME) in line with the fifth monetary policy to be released by January 12 next.
The central bank earlier asked the Plc banks and state-owned financial institutions to intensify disbursement of fresh farm loan along with rural credit to all sections of cyclone-affected people on easy terms and conditions.
Projections of different key macroeconomic indicators including credit growth in private and public sectors and overall money supply situation will be made in the policy, the sources added.
The first half-yearly monetary policy statement was issued on January 15, 2005, the second policy made public on July 13, 2006, the third policy released on January 14, 2007 and the fourth policy published on July 12 last.