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BB to maintain cautionary stance in new monetary policy

14 Jul 2017, 16:46

Online Desk

Dhaka: Bangladesh Bank (BB) will maintain its cautionary stance in the new monetary policy statement (MPS) which will be announced at the end of the current month (July). 

"We will not make any major change to the policy while announcing the MPS for the first half of the financial year 2017-18 (FY18)," a senior BB official told news agency BSS. 

Responding to a question about the date of announcement of the MPS, the BB official said, no decision was taken yet in this regard. "But it will be announced at end of this month (July)," he added. 

"The date for the MPS announcement will be fixed at a meeting of MPS committee which will be held on Sunday at the BB headquarters," he added.

Talking to the BSS about preparation of the MPS, BB Deputy Governor Abu Hena Mohd Razee Hassan said the MPS would be finalised on the basis of the national budget for the 2017-18 financial year and the fiscal policy directions. 

He said BB held meetings with stakeholders including economists to make the policy more effective for the country's economic development. 

"Different proposals have already come from the stakeholders. We are finalising the MPS after analysing the suggestions," he added. 

Talking to the BSS about the MPS, World Bank (WB) lead economist in Dhaka Dr Zahid Hossain said there is no reason for any major changes in the upcoming monetary policy. 

He said the government is likely to face revenue shortfall in the fiscal as the Value Added Tax (VAT) and Supplementary Duty Act, 2012 has been held up for the next two years. 

Moreover, the government has fixed the borrowing target from the banking system for the FY 18, he added. 

According to the national budget for FY18, the government has set the target at Taka 28,203 crore for borrowing from the banking system.

The WB economist said BB will have to accommodate the bank borrowing target to meet the revenue shortfall. 

Razee Hassan said like in the previous years, BB will continue its borrowing provision for the government in the upcoming MPS.

The central bank on January 29 this year unveiled the last MPS for the second half of the outgoing 2016-17 (FY17) financial year. Like the previous MPS, the last one also focused on attaining higher growth with lower inflation.

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