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Tuesday, January 31, 2012

In favor of MPS!

Dr. Zaidi Sattar, Chairman of Policy Research Institute writes why the central bank had to run for a drastic contractionary monetary policy in the face of upward trend in inflation and ongoing pressures on the balance of payments, a message given in Bangladesh Bank's new Monetary Policy Statement (MPS).

The whole argument is basically based on higher monetary growth that the central bank allowed before December 2010 (when the central suddenly increased CRR rate) basically to support the drastic expansion in fiscal policy took by the government. Since December 2010 (so, the policy adopted in the new MPS is not new), monetary growth has been restrained, basically in the private sector, which were mostly productive.

Here is the link of the article published in the Financial Express.  

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