Bangladesh Bank Monetary Policy Statement July-December 2024
Monetary Policy Highlights
The Bangladesh Bank has published its Monetary Policy Statement for July-December 2024. The statement outlines the central bank's monetary policy objectives, targets, and strategies for the upcoming six-month period.
The key highlights of the Monetary Policy Statement include:
- A reaffirmation of the central bank's commitment to price stability as its primary objective.
- A projection for inflation to remain within the target range of 5.0% to 5.5% during the upcoming six-month period.
- A decision to keep the policy repo rate unchanged at 5.50%.
- A series of measures to support economic growth, including increased lending to priority sectors and a reduction in the reserve requirement for banks.
Assessment of Economic Conditions
The Monetary Policy Statement provides an assessment of the current economic conditions in Bangladesh. The statement notes that the economy has continued to recover from the COVID-19 pandemic, with GDP growth projected to reach 6.4% in FY2024.
However, the statement also highlights some challenges to the economic outlook, including:
- Elevated global inflation, which is putting upward pressure on domestic prices.
- The ongoing war in Ukraine, which is disrupting global supply chains and increasing energy prices.
- A widening current account deficit, which is putting downward pressure on the taka.
Monetary Policy Objectives, Targets, and Strategies
The Monetary Policy Statement outlines the central bank's monetary policy objectives, targets, and strategies for the upcoming six-month period.
The central bank's primary objective is to maintain price stability. The statement notes that the central bank will use a combination of monetary policy instruments to achieve this objective, including:
- Open market operations.
- Changes in the policy repo rate.
- Reserve requirements for banks.
The statement also outlines the central bank's targets for inflation, GDP growth, and the current account deficit.
Conclusion
The Monetary Policy Statement provides a comprehensive overview of the central bank's monetary policy objectives, targets, and strategies for the upcoming six-month period. The statement highlights the central bank's commitment to price stability and its plans to support economic growth.
The statement also outlines some of the challenges to the economic outlook, including elevated global inflation, the ongoing war in Ukraine, and a widening current account deficit. The central bank will continue to monitor these developments and adjust its monetary policy stance as necessary.
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