Muhammad Ayub Ali :
Bangladesh Bank has announced a new monetary policy, maintaining the policy interest rate unchanged.
The new policy places special emphasis on three key areas of the stock market: strengthening good governance principles, restoring investor confidence, and reviving the market.
Experts suggest that monetary policy changes can indirectly affect firms’ stock values by influencing expected future cash flows.
An easing of monetary policy is expected to boost overall economic activity, which could positively impact stock prices.
Bangladesh Bank noted that the stock market experienced volatility during the first half of the 2025 fiscal
year (July-December).
During this period, the market was marked by a continuous downward trend, primarily due to a sharp decline in investor confidence.
The situation was exacerbated by political unrest, notably the student-led uprising, which led to significant changes in the Bangladesh Securities and Exchange Commission (BSEC).
The central bank highlighted that the newly appointed leadership of the BSEC has taken decisive action by imposing stringent fines on individuals and entities involved in market misconduct.
Rezaul Karim, spokesperson and executive director of the BSEC, expressed confidence in the stock market’s resilience, stating that discussions on security measures for investors and the central authority’s continued support have been positive.
He added that the central authority has played a key role in the bond market and in increasing liquidity in the stock market.
In addition to these punitive actions, the BSEC has established a specialised task force aimed at reviving the stock market, restoring investor confidence, and reinforcing good governance principles.
Bangladesh Bank reiterated that this comprehensive approach seeks to stabilise the current market environment and foster a strong and resilient financial ecosystem, ultimately rebuilding investor trust.
Market analysts have described the new monetary policy as supportive of stock market development.
They believe that Bangladesh Bank’s decision to keep the policy rate unchanged for the second half of the fiscal year, despite inflation and declining treasury yields, signals a positive outlook for the stock market.
