BB to maintain cautionary stance in upcoming monetary policy

Dhaka,  Sun,  24 September 2017
Published : 16 Jul 2017, 22:01:32
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BB to maintain cautionary stance in upcoming monetary policy

Bangladesh Bank (BB) will maintain its cautionary stance in the new monetary policy statement (MPS) which is expected to be announced at the end of this month, reports BSS.

"We will not make any major change to the policy while announcing the MPS for the first half of the financial year 2017-18 (FY18)," a senior BB official told the news agency.

Responding to a question about the date of announcement of the MPS, the BB official said, "It'll be announced at end of this month (July)."

Talking to the news agency about preparation of the MPS, BB deputy governor Abu Hena Mohd Razee Hassan said that the MPS would be finalised on the basis of the national budget for the 2017-18 financial year and the fiscal policy directions.

He said the BB held meetings with stakeholders including economists to make the policy more effective for the country's economic development.

"Different proposals have already come from the stakeholders. We are finalising the MPS after analysing the suggestions," he added.

Talking to the news agency about the MPS, World Bank (WB) lead economist in Dhaka Dr Zahid Hossain said there is no reason for any major changes in the upcoming monetary policy.

He said the government is likely to face revenue shortfall in the fiscal as the Value Added Tax (VAT) and Supplementary Duty Act, 2012 has been held up for the next two years.

Moreover, the government has fixed the borrowing target from the banking system for the FY 18, he added.

According to the national budget for FY18, the government has set the target at Tk 282.03 billion for borrowing from the banking system.

The WB economist said the BB will have to accommodate the bank borrowing target to meet the revenue shortfall.

Razee Hassan said like in the previous years, the BB will continue its borrowing provision for the government in the upcoming MPS.

The central bank on January 29 this year unveiled the last MPS for the second half of the outgoing financial year 2016-17 (FY17).

The last MPS, like the previous ones, also focused on attaining higher growth with lower inflation.
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