Home Business Announcing monetary policy with emphasis on controlling inflation

Announcing monetary policy with emphasis on controlling inflation

Announcing monetary policy with emphasis on controlling inflation

Bangladesh Bank increased the policy interest rate or repo rate by 25 basis points to 8 percent to control inflation. Bangladesh Bank Governor Abdur Rauf Talukder gave this information in a press conference while announcing the new monetary policy for January-June period on Wednesday.

Borrowing will become more expensive as the repo rate rises. Incidentally, in the language of economics, the crawling peg is a method of adjusting the exchange rate of the foreign currency with the currency of the home country; Where a currency with a fixed exchange rate is allowed to fluctuate within a range.

After announcing the monetary policy, the governor said that the monetary policy for the second half of January-June 2023-24 financial year has been formulated with the aim of keeping inflation within 6 percent. Until next June, inflation is 7.5 percent, GDP growth is estimated at 6.5 percent. However, inflation is expected to remain at 6 percent by the end of the year.

Abdur Rauf Talukder said, ‘The main goal of this monetary policy is to mitigate inflation. The effects of monetary policy take time to trickle down to the economy. It took time for inflation to come down. But inflation has started to come down since November.’

The governor of the central bank claimed that the price of the dollar in imports has been kept at 110 taka, which is still low compared to many countries in the world.

Meanwhile, the monetary policy was announced at a time when the country’s economy is under pressure due to inflation and foreign exchange crisis. In the new monetary policy, the private sector credit growth target has been reduced to 10 percent.