Bangladesh Bank (BB) will announce its monetary policy statement (MPS) today (Monday) for the second half of the financial year 2024-25 in which the policy interest rate is likely to remain unchanged.
There will be no major change in the exchange rate management either. The policy statement will mainly focus on slight decrease in inflation while the foreign currency reserves are stable at $20 billion.
Bangladesh Bank (BB) Governor Dr Ahsan H Mansur will hold a press conference and announce the new monetary policy. This policy will be discussed in the meeting of the Central Bank's Board of Directors on Sunday morning. This will be the first monetary policy of the interim government and the current governor.
Knowledgeable sources said the central bank will not go for contractionary policy to expansionary policy right now. The main challenges of the new policy will be controlling inflation, stabilizing the exchange rate and increasing the reserves,
BB announced the monetary policy for the first half of the current fiscal year on July 18 last year. The monetary policy announcement was made only on the website instead of holding a press conference by the former governor who was facing criticism for misusing power.
The then Governor Abdur Rauf Talukder took such a step in continuation of the ban on journalists entering the central bank.
The former bureaucrat resigned from an unknown place on August 9 while on the run after the student-public uprising and is still in hiding. After that, Dr Ahsan H Mansur took over the position of BB governor.
When the new governor took charge, the interest rate on short-term bank loans from the central bank to banks was 8.50 per cent. It was increased by 50 basis points in three stages to 10 per cent. As a result, the interest rate at the consumer level has now exceeded by 15 per cent. Even after that, there was talk of raising the policy rate again when inflation did not decrease.
However, according to latest estimate, inflation has decreased slightly. For this reason, the policy interest rate will not be increased for the time being. However, businessmen have been demanding a reduction rather than an increase in the interest rate considering investment and employment.
The source concerned said that in the first six months of the interim government, there has not been any major relief in the economy. However, the continuous deterioration that was happening in various fields has been stopped. Especially due to the strict policy against money laundering, the foreign exchange reserves are not decreasing as before.
Rather, it has been stable at $20 billion for a long time. Last Wednesday, the reserves stood at $20.20 billion. Before the current government took office, it was $20.39 billion at the end of last July; down from $48 billion, which had fallen to that level.
In the previous monetary policy, private sector credit growth was estimated at 9.80 per cent in December and next June. The growth was the lowest in last December. At the end of November of the previous month, it was 7.66 per cent. And at the end of December 2023, it was 10.13 per cent.
