Monetary policy lacks directive on bank rate cut: FBCCI

January 31, 2014

The monetary policy statements declared by Bangladesh Bank for next six months have no directives on reduction of high bank interest rate, the Federation of Bangladesh Chamber of Commerce and Industry on Thursday observed. Commenting on MPS for January-June period declared on Monday, FBCCI said that higher bank interest rate kept adverse impact of investment which disrupted economic growth in the country.
FBCCI, the apex trade body in the country, however, hailed the monetary policy terming it a balanced one prepared to expedite economic growth and ensure macro-economic stability.
In a press statement issued on Thursday, it said that the new monetary policy increased the growth target of credit flow to the private sector and it also emphasised on increasing investment and reducing inflation in the country which are positive side of the policy.
The MPS has also kept cautious measures in borrowing by the government from banking system which will also help in reducing borrowing from the sector, FBCCI hoped.
It also said that investors and entrepreneurs would feel encouraged in investment as the Bangladesh Bank has increased the growth targets of credit flow to private sector to 16.5 per cent from 15.5 per cent set in earlier MPS.
FBCCI, however, said that credit flow to private sector was not satisfactory despite 15.5 per cent growth target in last MPS amid lack of business-friendly environment due to political unrest, higher bank interest rate and higher bank charges in processing loans.
The trade body urged the central bank for bringing idle money in banks due to lower credit disbursement in last few months in investment otherwise such money might go in unproductive sector.

-With New Age input

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