Bangladesh Bank declared its monetary policy statement for the first half of the 2018-19 fiscal, retaining its growth-oriented stance.
The monetary policy will focus on upholding the economic growth like the previous year side by side keeping the inflation rate at a comfortable level, said BB Governor Fazle Kabir while announcing the monetary policy for July to December period in the current fiscal year at the Bangladesh Bank head office in Dhaka on Tuesday.
Fazle Kabir said the central bank has emphasised its monitoring and supervision after having discussions with a large number of stakeholders to ensure quality of credit by keeping unchanged the CRR (Cash Reserve Requirement) and repurchase agreement (repo) rates.
He mentioned the central bank has determined to maintain current level of repo and reverse repo rates at 6 and 4.75 percent respectively for balancing the inflation and output risks by improving liquidity conditions.
“The MPS sets ceilings of the private sector credit growth at 16.8 percent, domestic credit growth at 15.9 percent and broad money at 12 percent respectively,” the governor said, adding “The public sector credit growth is 10.4 percent, quite adequate to support the growth and to maintain price stability.”
He informed that the central bank will continue incentives and maintain supervision for ensuring that credit flows reach the priority sectors.
Agriculture, manufacturing sector and Small and Medium Enterprises (SMEs) can create more jobs while protecting environment, Fazle Kabir said, adding that the central bank has strengthened its supervision and monitoring to streamline credit to productive and employment generating sectors.
To ensure higher growth for achieving Sustainable Development Goals, Bangladesh Bank wants to ensure moderate interest rate as well as foreign exchange flexibilities for market development and employment, he said.
He added the central bank will contribute in maintaining a sustainable GDP growth by ensuring higher exports, remittances and private credit growth.
It is the high time for the investors to inject funds into the capital market as the recent strategic investment by the Chinese consortium – Shenzhen Stock Exchange and Shanghai Stock Exchange – will improve capacity and accelerate the development of the stock market, Kabir said.
“Now the capital market has been enjoying a favourable position as there is sufficient liquidity in the market side by side bank deposit rate has come down,” he mentioned.
Besides, the government is planning to reduce interest rate on savings certificate, which will push investors to inject more funds into the capital market, he added.