Monetary policy announced; BB governor assures of speeding up investment in productive sector

By AKM Moinuddin

Dhaka, Jul 19 (UNB) – Bangladesh Bank Governor Dr Atiur Rahman announcing the July-December monetary policy today assured of speeding up investment in productive sectors in support of the government development programme and discourage unproductive speculative investment.
The half-yearly policy was announced at press conference at the conference hall of Bangladesh Bank in presence of senior officials of the Bank.
He said the policy focused an approach of supportive stance to help promote faster inclusive economic growth with due vigil against inflationary pressures.
The monetary policy is aimed at supporting government’s policies and programme to place the economy in farmer footing through reducing poverty and maintaining monetary and price stability.
In the new monetary policy, the central bank attached importance to increasing productive investment through adequate lending supports and discouraging expansion in lending for wasteful consumption and unproductive speculative investments.
“Our financial inclusion initiatives for adequate lending supports for agriculture, SMEs, renewable energy and other productive sectors will further be expedited while the trend of discouraging unproductive investment will be strengthened,” said the Governor.
He sought for active role from the civil society leaders to support the initiatives of the central bank.
Replying to a question the governor said the growth in export and import was “deep-negative” in the last financial year due to global downturn.
“We’ve turned around since April last as we’re recovering from global recession and the export growth returned to a positive trend,” Dr Atiur said and hoped that both export and import growth will reach the double digit.
In response to another question he said the GDP growth rate would improve further if energy crisis is mitigated.
The governor said average CPI (consumer price index) inflation rate would remain within 6.5 percent at the end of the current fiscal.
Despite easing in domestic annual point to point CPI (consumer price index) inflation trend from March last year, average domestic inflation crept to 6.51 percent in April this year marginally crossing the target 6.50 percent..
The governor also said they would remain proactive in liquidity management operations.
The government set the GDP growth target for the current fiscal at 6.7 percent and inflation at 6.5 percent.
“To achieve the target we need favorable weather for agriculture, rapid recovery in export growth with market diversification and substantial increase in power and gas supply,” the governor said.
In the new monetary policy, the BB discouraged the commercial banks to excessive investment in the capital market to avoid risk. Circular issued to the banks directing them to keep investment in capital market with the prescribed limit.
Deputy Governors of the BB Md Nazrul Huda, Ziaul Hasan Siddiqui and Murshid Kuli Khan and advisers were present in the press conference.
END/UNB/AK