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Monday, October 10, 2011

Mess in the BD Macroeconomy

Dr. Mirza Azizul Islam writes in the Daily Star on the recent macroeconomic management in Bangladesh, finds a few serious flaws in it with special focus on the monetary policy and finally provides a few suggestions for return.

Here is the link. 

I rightly agree with all the views and suggestions that he provided. Yet, I want to add on the monetary policy: it seems, providing agricultural and SME credit has been the prime goal of the central bank over the last few years. The logic to provide more and more agriculture credit is straightforward to the central bank: to appease the food price through increasing agricultural production. However during the last couple of years, food prices has been increasing, which means the policy that the central adopted for controlling the food inflation has not been working. I just wonder whether the central bank made any self-evaluation on this part and think about any other effective alternatives.

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