Monetary Policy of Bangladesh

Salsabil RahmanID- 1304115

Focus

01.

02.

03.

04.

05.

Interest Rate

Inflation

Policy

Growth

Tools

expansionary

monetary policy

Strengthening

Economy Strategy

There were Increase in

CRR and SLR from mid May by 0.5 % and 1% increase

in Bangladesh

Bank’s overnight repo and

reverse repo

Increasing Public

and Private

investment

Strategy

Lowering Inflation Strategy

2011 1st Half

Avoid giving feedback if you lack: 2nd Half

restrictive (tight

money) monetary

policy

Interest rate Intervention

Strategy

Cash Reserve Ratio, Repo and Reverse Repo were

used

2012Reserve Money and Repo Rate

decrease inflationary and external

sector pressures

First Half

Restrictive Monetary

policy

Second Half

Inflation

economyExpansionary

CRR

In the time of world crisis, Bangladesh seemed to be untouched

CRR was pushed up to control the inflation

Inflation fell from 10.96% to 8. 74%

economy grew at 6%.

2013

2013

Expansionary

Repo Reverse Repo Cash Reserve Ratio government still wants to

pursue the expansionary policy

many tools are used to maintain a balance between growth and inflation

The government borrowings were in such a way that doesn't crowd out the investments

a monetary growth path which aims to bring

average inflation down to 7%

Banks were instructed to offer loan rescheduling

facilities to genuine borrowers

greater emphasis on providing services to rural

clients

But the target of growth limits reserve money

growth to 16.2%

Domestic retail interest rates declined

20141st Half

Restrictive Policy

food inflation

rose steadily

from 5.02% to

9.09%

control inflation as the main

objective

Although

average inflation

was falling, it wasn’t

the rate BB was targetin

g.

Suspended

Treasury Bill

auctions

CRR reduced the money supply in

the market which lead to to higher interest rate and damper investment

climate

20151st Half

Money Growth

Strategy

Investment Oriented Strategy

Inclusive Growth

Strategy

Inflation Control

Strategy

Increase Domestic Lending

20152nd Half

Moderate Inflation Strategy

Unemployment

Reducing Strategy

Inclusive Growth

Strategy

Lowering cost of

funds for productive

projects

Digital technology strategy to

stop banking irregularities

over the last 5 yearsInflation Rate

20112012201320142015

7.548.80

10.710.6

8.747.70

7.537.35

6.126.5

Thank You