Staff Reporter :
The Dhaka Chamber of Commerce and Industry (DCCI) has expressed concerns over Bangladesh Bank’s decision to maintain a contractionary monetary policy for the second half of the 2024-25 fiscal year, keeping the policy rate at 10 percent.
The chamber stated that while the policy aims to curb inflation, its rigid stance hampers private sector credit growth and economic expansion. It pointed out that the private sector relies heavily on banks for investment, and high interest rates increase production
costs, further fuelling inflation.
Although inflation eased to 9.94% in January 2025 from 10.89% in December 2024, it remains above the desired level. The DCCI also raised concerns about the decision to maintain the private sector credit growth target at 9.8% for the January-June period of FY25, as actual growth had fallen to 7.3% in the first half of 2025, the lowest in 12 years.
The chamber noted that public sector credit growth surged from the 14.2% target to 18.1% in December 2024, suggesting the need for austerity measures. It emphasised that to restore private sector confidence and improve business operations, credit growth must reach double digits.
The DCCI urged Bangladesh Bank to introduce sector-specific funds and entrepreneurial support programmes to boost credit flow, warning that restrictive monetary policies risk further economic stagnation.
Although the central bank has implemented a market-based exchange rate, the chamber noted discrepancies in the rates at which traders (both exporters and importers) are purchasing US dollars, calling for consistency to benefit all stakeholders, including traders and remitters.
The DCCI also criticised Bangladesh Bank for failing to take sufficient steps to strengthen banking governance amidst the liquidity crisis and rising non-performing loans (NPLs).
It urged the central bank to adopt a more flexible and balanced monetary policy, closely monitor its impact on inflation and growth, and implement targeted measures to boost private sector credit flow.
The chamber concluded by stating that by fostering a conducive environment for investment and ensuring macroeconomic stability, Bangladesh can achieve its economic growth and stability in the coming years.
