Published in Daily Sun on Wednesday, 30 January 2018
New monetary policy time-befitting: Experts
Leading business leaders, economists and bankers on Tuesday observed that the new monetary policy announced by the central bank is time-befitting and helpful for development in view of maintaining the trend of already gained economic progress.
The central bank announced the Monetary Policy Statement (MPS) for the second half (H2) of the current 2017-18 fiscal on Monday upholding its accommodative and growth oriented stance and raising the target of private sector credit growth as per the trend of the last six months, reports BSS.
The private sector credit growth rate has been targeted at 16.8 percent, which was 16.3 percent in the H1. The monetary programme retains domestic credit growth ceiling unchanged at 15.8 percent, adequate to accommodate the targeted 7.4 percent real GDP growth with up to 6 percent annual average inflation.
Terming the Monetary Policy Statement (MPS) as effective one for the election year, Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) former president Abdul Matlub Ahmad said the monetary policy will be helpful for bringing the Non-performing Loans (NPL) down to a tolerable level.
“As per the vision of Prime Minister Sheikh Hasina, there will be huge investments in the country in 2018.
So, the private sector credit growth should be 19 to 20 percent as the growth already crossed 18 percent on December 2017 and the vibration of growth is running,” he added.
According to the MPS, he said, the government’s inflationary measures will help keep prices of essential commodities within the purchasing power of common the people.
“The MPS is ok, but the initiative of reducing the limit of bank’s Advance Deposit Ratio (ADR) will impact the flow of investment as huge investments are likely to come in the country after installation of liquefied natural gas (LNG) terminal in June-July this year,” said Dhaka Chamber of Commerce and Industry (DCCI) Director Humayun Rashid. World Bank lead economist in Dhaka Dr Zahid Hussain said the MPS stance will help achieve the projected targets for FY18, but the achievement will depend on taking proper steps and ways of implementation.
“There is lack of policy guidelines in the new MPS for improving credit quality,” he added.
Research Director of the Centre for Policy Dialogue (CPD) Dr Khondaker Golam Moazzem said the MPS has been prepared retaining the macroeconomic trend of the last six months and the projected trends are expected to continue till June 2018.
In MPS, he said, the central bank has properly mentioned all challenges and potentialities in achieving the targets, which have been taken for the 2017-18 fiscal.
The MPS has effectively addressed the development of small and medium enterprises for keeping momentum of the economic progress, he said, adding, the MPS should be more cautious as 2018 is election year.