MPS (July-December 2013)

Bangladesh Bank (BB) announced a new monetary policy statement (MPS) for the period of July-December 2013. BB Governor terms it as a 'balanced' one (neither expansionary, nor contractionary) and as he noted:

"We walk on two legs. We've kept one leg flexible for attaining economic growth while the other is kept non-flexible for attaining the target of inflation." Then again, he said: "It's a creative one," while explaining the diversified interest of the MPS.

Basic targets of the MPS: 

(i) To bring average inflation down to 7.0%;

(ii) To contain reserve money growth to 15.5% and broad money growth to 17.2% by December 2013;

(iii) To increase the private sector credit growth to 15.5% by December 2013 and 16.5% by June 2014.

Although the MPS took basic assumptions such as economic and trade related factors into consideration, it didn't consider political violence for setting its target.

News update on the MPS:

1. BB aims to cut inflation rate to 7pc

2. Central bank aims to cut inflation rate to 7%

3. BB aims to lower inflation, keep up growth momentum