Central bank sets inflation target at 5.5% for first half of FY18

The central bank has announced the monetary policy for July to December period (H1) of fiscal year 2017-18 aiming to control inflation to achieve the GDP growth of 7.4% by June 2018. Bangladesh Bank Governor Fazle Kabir announced the Monetary Policy Statement fixing the inflation rate at 5.5%, which is same as the inflation rate the government targeted in the budget for this fiscal. The inflation rate at the end of last fiscal year stood at 5.4% against the pre-set target of 5.8%, said the governor. The central bank in its’ new MPS set the growth of broad money at 15.5%, while domestic credit growth was set at 15.8%. Private sector credit growth target by December was set at 16.3% and credit growth to public sector at 12.1%. “The central bank’s policy interest rates will continue to remain unchanged at the current levels of 6.75% and 4.75% respectively, due to the increasing food inflation and downward trending remittance inflow,” said Fazle Kabir.