Announces monetary policy for July-Dec<\/strong>
\nBangladesh Bank on Saturday announced the monetary policy for July-December cutting down the private sector credit growth target to 14 per cent from 16.50 per cent in the previous six months after failing to achieve the targets for the last two years.
\nThe BB, however, in another calculation showed the credit growth target for the private sector would be at 16.5 per cent in July-December by including the foreign loans taken by private firms in the policy for the first time.
\nThe central bank earlier set the private sector credit growth target at 16.5 per cent for the just concluded FY14 but the year-on-year growth stood at only 11.39 per cent in May 2014.
\nBB governor Atiur Rahman, while announcing the monetary policy for July-December at the central bank headquarters in the capital, termed the latest monetary programmes as \u2018cautious and environment friendly\u2019 like its previous policy.
\nHe said that they had included the foreign loans taken by the private firms into the calculation of credit growth because of the rise in foreign credit in the private sector.
\nReplying to a question, BB chief economist Hasan Zaman said that the foreign loan growth in private sector had been estimated at 2.50 per cent considering the recent rise in overseas credit.
\nEconomists and BB officials told New Age that the central bank might fail again to achieve the private sector credit growth if the existing political uncertainty did not improve in the coming months.
\nBesides, they said, the central bank\u2019s target of 14 per cent credit growth, even if achieved, might not be enough to achieve the GDP growth target of 7.3 per cent set by the government.
\nThe central bank was not able to achieve its monetary programmes for the private sector in the last few years due to unfriendly business environment amid political uncertainty and unrest.
\nAtiur said the central bank in its latest monetary policy put importance on ensuring the financial stability in the banking sector along with the price stability.
\n\u2018The central bank has already fired managing director of BASIC Bank due to his suspected involvement in corruption and suggested the government for reconstitution of the board of directors of the bank. The government has taken the initiative replying the central bank suggestions\u2019, he said.
\nThe central bank will take more programmes in the coming days to make vibrant the country\u2019s investment sector and capital market, Atiur said.
\nThe BB is now discussing with the Bangladesh Security and Exchange Commission to provide the entrepreneurs with equity finance in line with rules and regulations, he said.
\nThe exchange rate of the taka against the US dollar continued to face a pressure due to a lower import payment against a higher growth of export earnings and steady growth in inward remittance, the BB governor said.
\nThe BB will continue to purchase the greenback from the local market to keep stable the exchange rate between the dollar and the taka, he said.
\nThe interest spread rate of the banks, the gap between interest rate on deposit and lending, has recently increased due to a higher interest rate on lending against lower rate on deposit, Atiur said.
\nThe BB continues to pressurise the banks to lower their interest rate on lending, he said.
\nThe central bank set the annual average consumer inflow target at 6.5 per cent by June of the FY15 from it earlier target of 7 per cent by June 2014. The inflation, however, stood at 7.35 per cent at the end of June 2014.
\nFormer BB governor Salehuddin Ahmed told New Age on Saturday that the central bank set a traditional monetary policy as the monetary programmes were almost similar to the previous policies.
\nHe said the BB should have increased the credit growth target in the private sector in its monetary policy to regain the confidence of the businesspeople.
\nThe monetary programmes will not be a success if the political situation does not improve, Salehuddin said.
\nFormer finance adviser to the caretaker government AB Mirza Azizul Islam told New Age that the credit growth in the private sector had maintained a slow trend in the recent period due to a lower credit demand from the businessmen.
\nThe lower credit demand is still persisting as the businessmen are yet to get confidence back to expand their business due to the political uncertainty, he said.
\nThe success of monetary policy will depend on the political stability, he said.
\nIn its latest MPS, the BB, however, set a private sector credit growth target at 15.5 per cent at the end of the FY15.
\nThe BB set the public sector credit growth at 12.9 per cent by December 2014 and 24.8 per cent by June 2015 in line with the government requirement.
\nThe BB set the net foreign asset growth target at 30.3 per cent by December 2014 and the net domestic asset growth target at 12.4 per cent.<\/p>\n

-With New Age<\/strong> input<\/p>\n","protected":false},"excerpt":{"rendered":"

Announces monetary policy for July-Dec Bangladesh Bank on Saturday announced the monetary policy for July-December cutting down the private sector credit growth target to 14 per cent from 16.50 per cent in the previous six months after failing to achieve the targets for the last two years. The BB, however, in another calculation showed<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","footnotes":""},"categories":[4],"tags":[],"yoast_head":"\n