Monetary policy seen realistic

DHAKA, Jan 30, 2017 (BSS) � Leading economists, business leaders and bankers today observed that the monetary policy announced recently by the Bangladesh Bank is time-befitting and realistic in view of maintaining the trend of already gained economic progress and projecting achievable targets for the financial year 2016-17 (FY17).

The central bank announced the Monetary Policy Statement (MPS) for the second half of the current 2016-17 financial year yesterday upholding its cautiously accommodative stance and keeping unchanged the economic indicators, including private sector credit growth and domestic credit growth that has projected to grow by 16.5 percent and 16.4 percent respectively.

World Bank lead Economist in Dhaka Dr Zahid Hussain said the MPS stance will help achieve the projected targets for FY17, although there is lack of policy guidelines in the new MPS for improving credit quality and foreign exchange reserve management.

The projected targets, including GDP growth, broad money growth and inflation, are close to the reality, he said adding the monetary policy is time-befitting to meet the targets.

In the MPS, the central bank has kept unchanged the average inflation of 5.8 percent and ceilings of broad money growth of 15.5 percent and GDP target 7.2 percent for the FY17.

Mentioning the MPS as the repletion of the people's hope, Additional Research Director of the Centre for Policy Dialogue (CPD) Dr Khondaker Golam Moazzem said the MPS has been prepared retaining the macroeconomic trend of the last six-month and the projected trend is expected to continue till June 2017.

Terming the BB's steps to keep tightened the monitoring on share markets as a good one, he said if BB takes up an initiative to provide all information relating to the banks investment in the stock markets, it can be good for all. BB's careful watch on stock markets is logical he added.

Terming the MPS as pro-private sector, Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President Abdul Matlub Ahmed said the new monetary policy is ok but lacks policy guideline on recovering non-performing loans and checking 'black money'.

"But during our meeting with BB, we have requested them to give a policy guideline for recovering the non-performing loan, which is over Tk 60,000 crore," said Matlub Ahmad. "We have expected some steps from the BB's side in this respect," he added.

About the 'black money', he said, FBCCI recommended some measures to be undertaken by BB in its monetary policy to check money laundering but it did not take any step in this regard yet.

Chairman of Association of Bankers, Bangladesh Anis A Khan said the projected target of the MPS would be achieved as the political atmosphere of the country is stable now. It is a good policy statement. The GDP forecast of 7.2 percent is very optimistic, he added.

Source: Bangladesh Sangbad Sangstha (BSS)