FBCCI welcomes cautious monetary policy statement

Welcoming the half-yearly (H1 FY2015-16) monetary policy, Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) on Sunday termed it a policy designed to avoid excessive inflation.
Through a press release, FBCCI also thanked the central bank for the policy statement’s emphasis on boosting investment, accelerating GDP growth, staying cautious on taking government loans from the banking system and declining inflation rate, UNB reported.
Bangladesh Bank announced its half-yearly (H1 FY2015-16) monetary policy on July 30 aiming to curb inflation and increasing investment to support 7% growth target and 6.2% inflation target.
Terming monetary policy as the basic foundation of economic growth, the apex trade body said adequate currency supply as well as controlling inflation rate is the most important element in the policy to secure the interest of investment and employment.
FBCCI also upheld some recommendations for proper implementation of the newly announced policy:
i) The business body projected that 34 percent of the GDP should be invested to achieve 8 percent GDP growth target to make Bangladesh a middle income country by 2021.
ii) Adequate supply of currency and investment-friendly interest rates and bank charges should be executed.
iii) The banking system should set targets to provide sector wise loans emphasizing SME sector and women entrepreneurs, and interest rates should be kept within single digit to give them better opportunities.
iv) Ensuring investment in productive sectors and strengthening monitoring system to focus on quality loan distribution.
v) Mentioning that interest rates in contending countries are lower than Bangladesh, FBCCI said high interest in Bangladesh is amplifying the cost of doing business which has hardened the opportunities of Bangladeshi businessmen to compete globally.
vi) For the sake of investment, cost of fund on bank loans for all sectors should be lessened to 2.5 percent, said FBCCI.
FBCCI also noted that although there was a target of 15.5 percent loan flow for the private sector in the last monetary policy, loan growth in the private sector was only 13.6 percent till June 2015. Therefore they feel it is necessary to ensure infrastructural facilities and loan flow on easy terms to cheer up the private sector entrepreneurs.
-SS