Broad money supply (M2) in the economy grew by Tk 72.7 billion (0.36 per cent) in November 2024, hitting Tk 20,407.85 billion, a notable deceleration from the Tk 83.62 billion (0.41 per cent) increase recorded in October 2024.
On a year-on-year basis, M2 expanded by Tk 1,513.62 billion (8.01 per cent) compared to November 2023, slightly below the Tk 1,489.51 billion (8.56 per cent) noticed during the same period last year, according to BB latest statistics.
This moderation in monetary growth reflects a complex interplay between rising net domestic assets and declining net foreign assets, signaling both resilience and vulnerability in the economy.
The year-on-year expansion in M2 was primarily driven by a Tk 1,705.71 billion (10.50 per cent) surge in net domestic assets, underscoring robust domestic credit demand and liquidity infusion by the banking sector.
However, this was partially offset by a Tk 192.09 billion (7.23 per cent) contraction in net foreign assets, highlighting persistent pressures on external balance sheet. The divergence between domestic and foreign asset performance underscores the challenges faced by policymakers in maintaining macroeconomic stability amid global headwinds and domestic inflationary pressures.
Historically, Bangladesh's M2 growth has been a reliable barometer of economic activity, reflecting the interplay between monetary policy, credit expansion, and external trade dynamics. The current 8.01 per cent year-on-year growth, while healthy, marks a slight deceleration from the previous year's 8.56 per cent, suggesting a cautious approach by the central bank to rein in inflationary risks.
Global comparisons reveal a mixed picture: emerging markets like India and Vietnam have also experienced similar monetary tightening, while advanced economies grapple with elevated interest rates and subdued growth.
Experts attribute the rise in net domestic assets to sustained credit demand from private sector enterprises and households, fueled by post-pandemic recovery efforts and infrastructure investments.
"The growth in domestic assets is a positive sign, indicating that the economy is leveraging internal resources to drive expansion," said a senior economist at the Dhaka-based Policy Research Institute.
