Friday 29th of March 2024
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   National
Monetary policy announced to rein in inflation, volatile forex market
  Date : 29-03-2024

Online Report : The new monetary police has been announced keeping the inflation control and economic growth in mind, BB Governor Fazle Kabir announced it on Thursday (June 30).

The regulator has taken a cautious policy stance with a tightening bias in the new monetary policy.

Private sector credit growth ceiling has been set at 14.1 per cent for the next fiscal year, down from 14.8 per cent that was set for the outgoing fiscal year.

The central bank will introduce a new refinance line of credit for import-substituting products to minimise import dependency and save valuable foreign exchange reserves.

The LC margins for luxury goods, fruits, non-cereal foods, canned and processed foods will be raised extensively to discourage their imports.

The BB will continue its support for implementing the government`s ongoing stimulus packages alongside BB`s refinance schemes in the wake of new adversities, including the Russia-Ukraine war, in addition to the Covid-19 pandemic.

Bangladesh Bank Governor Fazle Kabir said a review of the latest state of the global and domestic economy, and the recent economic impact of floods in the northeast shows that the main challenge for the monetary policy for FY2022-23 would be to stabilise the domestic exchange rate.

"At the same time, continued support for ongoing economic recovery aimed at job creation is essential for the forthcoming monetary policy."

According to the Finance Minister`s national budget speech, the government`s desired GDP growth and inflation targets for FY 2022-23 are 7.5 per cent and 5.6 per cent, respectively.

"Bangladesh Bank will continue to strive for the overall stability and long-term development of the capital market, which is essential for the development of the country`s financial sector, in FY2022-23 as in the past. In order to increase the liquidity in the capital market, the size of the assistance fund for the affected small investors has been increased by Tk 153 crore to Tk 1,009 crore at the initiative of Bangladesh Bank.

"Apart from releasing Tk 280 crore from this fund, Tk 118 crore has been provided through repo under the facility of setting up a special fund of Tk 200 crore for each bank`s investment in the capital market", said the governor.

In the proposed budget of coming fiscal, the government has made a target of 5.6 per cent inflation. In May this year, the inflation was 7.5 per cent which was the highest in last 8 years.

END/SZA/Observer



  
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