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The announcement of the Monetary Policy Statement (MPS) for the second half of the current fiscal year (FY26), scheduled for today, has been postponed.
The reason for postponement, according to BB officials concerned, is that some central bank board members have sought to know the reasons behind the failure of the tight monetary stance to lower inflation.
The central bank was scheduled to publicly unveil the MPS through a press conference today.
Some BB board members at Tuesday's board meeting raised questions about why the inflation-containment target has not been achieved despite the continuation of a tight monetary policy stance since October 2024, and sought detailed clarification from the monetary policy department of the central bank, BB officials involved in the MPS said.
The BB traditionally announces the Monetary Policy Statement in January, whether annual or half-yearly.
If this MPS-unveiling programme is deferred until next month -- February -- it will be the second such instance of breaking the tradition
Last year, the unveiling of the key document for the country's finance and economy was deferred to February 2025.
Seeking anonymity, a BB official said the MPS was one of the key agendas at last Tuesday's BB board meeting for approval, but some board members sought clarification as to why the inflation had mot come down despite pursing a tight monetary policy.
However, the board approved the agenda, instructing the monetary policy department to provide detailed clarification in a simple manner so that it can be easily understood by all stakeholders, he said.
"We're preparing a detailed explanation so that businesses and even common people can understand the situation. We're planning to hold the MPS-unveiling-related press conference on February 2," the central banker added.
Another central banker said monetary policy is one of the components for containing inflation, but there are many other inflation-fuelling factors, such as fiscal dominance over monetary policy and supply-side shocks.
"The transmission of the tight monetary stance to the market is largely hampered due to non-monetary factors. We're incorporating these in detail in the clarification," he added.
Monetary policy is one of the most important macroeconomic instruments through which the central bank ensures price stability by controlling the overall money supply, promotes economic growth, and employs strategies such as revising interest rates and changing bank reserve requirements.
According to the decision of the Monetary Policy Committee (MPC) meeting held on January 22, the policy rate will remain unchanged in the upcoming MPS for the second half of the current fiscal year, as inflation has rebounded after some remission.
Despite an outcry from business circles over the higher lending-rate regime amid a persisting economic slowdown, BB continues its tight stance to contain inflationary pressures by keeping the policy or repo rate as high as 10 per cent, a level maintained since October 2024.
Under such a tight-fisted regulatory stance on money supply aimed at checking price escalation, Bangladesh Bank Governor Dr Ahsan H Mansur has on several occasions made clear statements on policy rate adjustment, saying the central bank will continue its tight monetary policy posture until the inflation rate comes down to 7.0 per cent.
In line with this target, the MPC decided not to make any change to the existing policy stance in the forthcoming MPS for the January-June period of fiscal year 2025-26.
According to data from the Bangladesh Bureau of Statistics (BBS), headline inflation rose to 8.49 per cent in December from 8.29 per cent in November and 8.17 per cent in October.
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