Business Initiative Leading Development (BUILD) organized a dialogue on Monetary Policy Statement (MPS) and Containing Inflationary Pressure in Bangladesh on 30 July 2023 at BUILD Conference Room. The dialogue covered new areas in the MPS for 2nd half of 2023 (H1FY24), and comparison of the inflationary situation and challenges of monetary policies and the new tool on interest rate corridor(IRC) as followed by different countries in the world.
BUILD CEO Ferdaus Ara Begum delivered a keynote highlighting the challenges of MPS and interest rate corridor and focused on ways to address inflation through different central bank tools. She further said that inflation is linked to many factors, such as the state of the economy, the level of inflation expectations, the credibility and independence of the central bank and the confidence of businesses in the business-enabling ecosystem.
Mr Mohammad Nurul Amin, former MD of NCC Bank, presented the keynote paper and said that establishing a policy of interest rate corridor as a monetary tool is a paradigm shift. In that respect, he added that the reference interest rate for bank deposit and lending rates naming SMART is a transition from monetary targeting framework to an interest rate targeting framework. He said that MPS is contractionary to contain inflation, as announced by specific policy initiatives, but fiscal measures are expansionary. He raised the point of whether we will go for a market-driven treasure rate or follow the donors’ prescription to follow IRC.
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