Bangladesh Bank has announced a new monetary policy in the second half of the current fiscal year (2025-26).
This monetary policy has given priority to controlling inflation.
For this purpose, the policy interest rate has not been increased.
But the central bank has given a message to keep the existing high interest rates of bank loans unchanged in the market.
Besides, the public sector credit flow target has been reduced. It is expected that this will reduce the pressure on inflation.
The target of increasing money supply in the market has been kept unchanged as before.
In fact, through these measures, the central bank has followed the contractionary trend in monetary policy as before.
The central bank has announced this new monetary policy on Monday.
It is to be noted that the main source of economic growth and employment in the country is the private sector.
Most of the industrial production, marketing or service sector is dependent on the private sector.
But this sector is being deleveraged by increasing public sector borrowing and talking about controlling inflation.
Although inflation has not reduced, the cost of living is increasing. If this trend continues, the business situation will worsen in the future.
There is a danger that traders will fall into a more fragile situation due to the increase in defaulted loans. However, price inflation eased slightly last month due to lower prices of winter vegetables.
However, this effect is temporary, there is a fear that the price of vegetables will increase once the season is over. The prices of other products are on the upward trend.
In such a situation, the expectation of Bangladesh Bank in terms of monetary policy that inflation will come down in the coming days is also a question about how realistic it is.
In fact, it is not possible to control inflation in a country like Bangladesh only through monetary policy.
For this, there is a need for fiscal policy as well as strong supervision in market management.
Due to high interest rates, domestic entrepreneurs will fall behind in the competition.
If this trend continues, new employment in the country will be hindered.
To accelerate the economy to the desired level, steps must be taken to create an investment-friendly environment.
