The central bank is set to unveil today its monetary policy for the current fiscal year (FY) with an eye to accelerating recovery of the pandemic-hit economy, officials said.
The Bangladesh Bank (BB) would announce the monetary policy statement for FY 2021-22 through its website to expedite offsetting the adverse impact of coronavirus on the economy through creating scope to finance more in productive sectors, they explained.
They said the ongoing expansionary monetary policy stance would be continued this fiscal year with the necessary adjustment of monetary and other macroeconomic developments.
Besides, the policy rates, including CRR (cash reserve requirement), SLR (statutory liquidity ratio), repurchase agreement (repo) and reverse repo, might remain unchanged for FY22, they hinted.
As part of the strategies, the central bank is not interested in mopping up excess liquidity from the market through using monetary instruments like reverse repo or BB bills immediately.
"Actually, we want to help banks manage their funds smoothly amid the second wave of the Covid-19 pandemic in Bangladesh," a senior BB official told the FE while explaining to a query.
Meanwhile, banks' excess liquidity hit an all-time high of Tk 2.31 trillion as of June 30 this calendar year, fuelled by lower private credit growth in a sign that the investment situation has cooled.
The central banker said the BB might use its monetary instruments to mop up such excess liquidity if needed.
The regulator has finalised its aggregate monetary programme to achieve higher economic growth keeping inflation under control, according to the officials.
For FY22, the government has set the gross domestic product (GDP) growth target at 7.2 per cent with an aim to keep inflation within 5.3 per cent.
The private-sector credit growth target has been fixed at around 15 per cent, given the overall economic situation alongside fund requirements of the government to finance budget deficit, they added.
Earlier, the central bank's board asked the officials concerned to take effective measures in the next monetary policy for enhancing private credit growth in near future.
They further said that the latest trend of inflationary pressure on the economy has been considered to finalise the private-sector credit growth ceiling for FY22.
Private credit growth rose to 8.40 per cent year on year in June 2021 from 7.55 per cent a month ago.
The growth was 8.79 per cent in March 2021.
It was 6.40 percentage points lower than the BB's target of 14.80 per cent for the second half of FY21.