BB unveils monetary policy for January-June period

FE Report | Published: January 30, 2019 17:15:19 | Updated: February 06, 2019 21:07:53

The central bank unveiled its second half-yearly (H2) monetary policy statement (MPS) on Wednesday keeping key policy rates unchanged.

Bangladesh Bank (BB) Governor Fazle Kabir at a press conference announced the MPS for the January-June period of this fiscal year (FY) 2018-19 to facilitate productive sectors for achieving sustainable economic growth with curbing inflation.

The private sector credit growth target was re-fixed at 16.50 per cent from 16.80 per cent earlier for the H2 of FY 19 while credit growth to the public sector rose to 10.9 per cent from 8.5 per cent.

The BB’s downward revision came against the backdrop of falling trend in the private sector credit growth in the recent months mainly due to the last national election.

 Meanwhile, the private sector credit growth came down to 13.30 per cent in December 2018 on a year-on-year basis from 14.01 per cent a month ago, the BB data showed.

The growth was 3.50 percentage points lower than the BB’s target of 16.8 per cent for H1 of FY 19.

Possible uncertainty and wariness over the last parliament election may cause declining trend in the private sector credit growth during the period under review, the BB governor explained.

The central bank chief also believes that the private sector credit growth is enough for achieving 7.80 per cent GDP (gross domestic product) growth by the end of this fiscal year.

The policy rates, including CRR (cash reserve requirement), Repo and Reverse Repo, remained unchanged for H2 of FY 19, according to the MPS.


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