Business Initiative Leading Development (BUILD) organized a dialogue on Monetary Policy Statement(MPS) and Containing Inflationary Pressure in Bangladesh on Sunday at BUILD Conference Room.
The dialogue majorly covered new areas in the MPS for 2nd half of 2023(H1FY24) and Comparison of 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 for addressing inflation through different tools of the central bank.
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 over business-enabling ecosystem.
Mohammad Nurul Amin, former MD of NCC Bank presented the keynote paper and said that establishment of 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 Banks deposit and lending rates naming SMART is a transition from monetary targeting framework to interest rate targeting framework.
Prof Dr Mahmood Osman Imam, Professor, Department of Finance, Dhaka University mentioned that IRC will be used as a tool for the banking sector and not for others, while SMART rate will work as a reference rate for determining interest rate.
Speaking as the Chief Guest, Dr. Md. Ezazul Islam, Executive Director (Research), Monetary Policy Department, Bangladesh Bank said that MPS also needs to be communicated, today’s program is one of the testimonies and he appreciated the role of BUILD in that respect.
He said that primary goal of MPS is to maintain price stability and for this MPS passes through a framework which is very important, this framework has gone through a number of changes over the years.
"After the global financial crises monetary policy statement has been facing a number of transition. In this transition mechanism there are different channel, these are interest rate channel, credit rate channel, bank lending channel and exchange rate channel", he added.
MCCI President Md. Saiful Islam said that public sector growth is higher than private sector growth which is critical to the country’s infrastructure. Private sector cannot invest more if there is no infrastructure so both public and private sectors growth is interlinked.
Dr. Md. Mafizur Rahman, Managing Director, SME Foundation, Dr. Jamaluddin Ahmed, former General Secretary of the Bangladesh Economic Association (BEA), Mohammad Refayet Ullah Mirdha, President, ERF, Dr Lila Rashid, former Executive Director of Bangladesh Bank, Manzur Ahmed, Adviser, FBCCI, Shawkat Hossain, former MD, BD Venture, Abdula Hai, Manager, Nestle BD spoke among others.
