Bangladesh Bank is preparing a contractionary monetary policy statement (MPS) for the second half of the current fiscal year to control the supply of credits and inflation in a bid to maintain economic stability, according to officials. The new monetary policy is expected to ensure price stability, and gain public trust in currency. Monetary policy plays a vital role in controlling the supply of money, often by setting up a target of inflation rate or interest rate, they said. With the MPS being a contractionary policy, the officials claimed that it would be a growth-supportive measure. As a part of announcing the MPS, Bangladesh Bank has already hinted at taking some steps such as discouraging credit supply to less productive sectors.

Source: Dhaka Tribune January 23, 2018 19:12 UTC