The New Nation - Internet Edition

NATION BUSINESS REPORT

Bangladesh Bank is expected to announce its monetary policy for the second half of the current fiscal year tomorrow (Thursday).

The policy is of expansionary nature as before, Bangladesh Bank sources said.

'The new monetary policy to be announced is in line with the election manifestos of the ruling alliance components, such as containing the price spiral of essential commodities, generating employments and enhancing the purchasing capacity of the commons, a senior economist of Bangladesh Bank, told the New nation yesterday.

The current macro-economic indicators favour pursuing an expansionary monetary policy, he said.

'Under the new monetary policy, the central bank will keep the credit flow to sectors like agriculture, manufacturing and industry uninterrupted to achieve a higher economic growth,' he added.

BB Governor Saleh Uddin Ahmed has already explained the new monetary policy to Finance Minister Abul Maal Abdul Muhith at the latter's secretariat office, sources said.

According to their views, the policy will be announced this week, if the government does not suggest any major changes to the draft policy.

The central bank had earlier forecast a 6.2 per cent economic growth in the current fiscal year, higher than the World Bank's growth projection between 4.8 and 5.8 per cent in view of the financial crisis in the West.

'To achieve the growth target, the monetary policy needs to be expansionary, so that it can help beef up both public and private investments in the last half of this fiscal year,' he explained.

During the last three months, the central bank has applied monetary tools at least once to contain private sector credit growth that went up by more than 26 per cent in the first quarter of the current fiscal year 2008-09.