Dhaka: Bangladesh Bank on Thursday announced a ‘cautious but explicitly pro-growth’ monetary policy for the next sixth months (July-December) supporting a 7% growth target and keeping the inflation within 6.2% percent for the fiscal year 2016.

Announcing the policy, central bank governor Dr Atiur Rahman said there has been no major change in the new monetary as the main objective was to continue the ongoing policy stance to promote investment and employment generation.  

However, Bangladesh Bank chief economist Dr Birupakkha Paul said some fine-tuning measures will be taken as and when required to keep the inflation pressure low.  

In the policy, the total domestic credit growth was projected to be 16.5% at the end of the fiscal 2015-16, while the private sector credit growth was targeted to be 15% and the public sector credit at 23.7%.

It was, however, admitted that in the last fiscal the overall domestic credit growth was targeted to be 17.4%, but achieved below 10.4% until May 2015.  

Similarly, the private credit growth was assumed to be 13.6% against the target of 15.5%.  

The new monetary policy predicted that the country's foreign exchange reserve might see a downward trend in the coming days due to the expected increase in the import growth. In that case, the local currency might experience a depreciating pressure.  

Atiur Rahman said one of the main focuses for the new policy is to create a $500 million new foreign exchange investment fund for the small and medium scale industries and green ventures.  

This fund has been creating for bringing equality for the export-oriented small and medium industries that do not get the foreign loans like big industries. The rate of interest of the loan from new fund will be significantly low. ‘The interest rate of the new fund will be less than half of the current rate of interest,’ he said.  

He said the export-oriented textile, garment and leather industries will get this loan for environment-friendly projects.  

Besides, the central bank has been in negotiations with the World Bank to increase the volume of the WB-supported IPPF fund which is now being utilized for the investment in infrastructure projects in power and other sectors.  

In the new monetary policy, the reserve money is projected to grow at

16.5% and broad money (M2) at 15.6% which the central bank says adequate to support the growth and inflation targets.  

The function was also addressed by deputy governors of Bangladesh Bank Abu Hena Razee Hassan, SK Sur Chowdhury and Nazneen Sultana and Change Management Advisor Allah Malik Kazemi.