MPS for H2 in FY’17 fails to achieve target

The Monetary Policy Statement has failed to achieve its target in almost all categories during the second half of the just-concluded fiscal year 2016-17. In the performance analysis of January-June period, it has been noticed that the credit growth in the private sector rose only 11% till May while it was estimated at 16.5%. The trend shows that the growth won’t be optimum even in June. The inflation was stated at between 5.3% and 5.6%, but stood at 5.72% mark during the six months of FY’17. In terms of Net Domestic Asset (NDA) growth, it went on the downswing than estimated. The NDA only stood at 12.24% while the target was 17.3%. Broad money has also failed to achieve its target of 15%. Till May, it only achieved 11.69% growth. Likewise, other categories in the MPS also followed the suit. The central bank is likely to announce its Monetary Policy Statement (MPS) for the first half (July-December) of the new Fiscal Year 2017-18 on July 25. Bangladesh Bank Governor Fazle Kabir will announce the MPS. BB is currently holding talks with stakeholders and economists to make the policy more effective for the country’s future economic development. Different proposals have already been made by the stakeholders. However, the central bank will finalise the statement after analysing the suggestions. Monetary policy plays a vital role in controlling money supply, often by setting up the target of inflation rate or interest rate, and ensuring price stability and general trust in the currency.