...Assignment on Monetary Policy in Bangladesh INTRODUCTION: Monetary Policy the policy adopted by the central bank for control of the supply of money as an instrument for achieving the objectives of general economic policy .With the shifts of the policy stance of the government in various phases, necessary adjustments were made in the country's monetary policy. The Department of Research in the Bangladesh Bank plays an important role in the formulation of economic policies of the country. The principal function of the Department is to help the bank in the formulation of monetary and credit policies and also to assist it in discharging its duty as adviser to the Government on economic and financial matters. To this end, the department keeps the top executives of the bank fully informed of latest economic development both at home and abroad, in a regular and systematic manner. For this purpose the Department keeps a close watch on trends in the domestic economy as well as on international economic developments with particular reference to monetary, fiscal land trade problems and policies. Domestic and international economic developments are brought within the compass of comprehensive reports and reviews which are submitted for perusal of theGovernor, Deputy Governor, and Senior Executives of the bank, as also the bank’s Board of Directors. Definition of Monetary Policy: Monetary policy is the term used by economists to describe ways of managing the supply of money in an...
Words: 2601 - Pages: 11
...of the term paper Monetary Policy Reason of publishing 04 Types of Monetary Policy 05 Monetary Policy in Bangladesh 06 Tools & Strategy of Monetary Policy 06 Major tools used by Bangladesh Bank 07 Policy Target 12 Limitations of Monetary Policy 13 Findings of the study Chapter-03 03 Scope & Objective of Monetary Policy Chapter- 02 03 14 Conclusion 14 Bibliography 14 Chapter- 01 Introduction “Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. Monetary theory provides insight into how to craft optimal monetary policy. It is referred to as either being expansionary or contractionary, where an expansionary policy increases the total supply of money in the economy more rapidly than usual, and contractionary policy expands the money supply more slowly than usual or even shrinks it. Expansionary policy is traditionally used to try to combat unemployment in a recession by loIring interest rates in the hope that easy credit will entice businesses into expanding. Contractionary policy is intended to slow inflation in hopes of avoiding the resulting distortions and deterioration of asset values. In this report I tried to show that how monetary policy is related to the economy...
Words: 3927 - Pages: 16
...qwertyuiopasdfghjklzxcvbnmqwerty uiopasdfghjklzxcvbnmqwertyuiopasdf ghjklzxcvbnmqwertyuiopasdfghjklzxc vbnmqwertyuiopasdfghjklzxcvbnmqw ertyuiopasdfghjklzxcvbnmqwertyuiop asdfghjklzxcvbnmqwertyuiopasdfghjkl zxcvbnmqwertyuiopasdfghjklzxcvbnm qwertyuiopasdfghjklzxcvbnmqwertyui opasdfghjklzxcvbnmqwertyuiopasdfgh jklzxcvbnmqwertyuiopasdfghjklzxcvb nmqwertyuiopasdfghjklzxcvbnmqwer tyuiopasdfghjklzxcvbnmqwertyuiopas dfghjklzxcvbnmqwertyuiopasdfghjklzx cvbnmqwertyuiopasdfghjklzxcvbnmrt yuiopasdfghjklzxcvbnmqwertyuiopasd fghjklzxcvbnmqwertyuiopasdfghjklzxc vbnmqwertyuiopasdfghjklzxcvbnmqw ertyuiopasdfghjklzxcvbnmqwertyuiop asdfghjklzxcvbnmqwertyuiopasdfghjkl The Autonomy of Bangladesh Bank ECO 432 Term Paper Submitted by: Sardar Mohammad Imrose Sumaiya Mahabub Kazi Sakif Zaman Reza Maria Matin Samiha Moyeen P a g e 2 Table of Contents Introduction:.........................................................................................................................................3 Background:..........................................................................................................................................3 Theory of Autonomy:..........................................................................................................................4 What is Autonomy?..............................................................................................................
Words: 8059 - Pages: 33
...The recent monetary policy of Bangladesh BANK The central bank declared its half-yearly monetary policy aiming to contain inflationary pressures through discouraging credit flow to unproductive sectors and for speculative purposes including real estates and investments in stock market beyond affordable limits. While releasing the monetary policy statement (MPS) for July-December period of the current fiscal year, The governor of the central bank said that the monetary policies in fiscal year 2011-12 will need to continue in the restraining stance on credit growth as pursued in fiscal year 2011. He also told that the policies, as before, will selectively bear down on growth of credit for wasteful, unproductive and speculative uses while ensuring adequate credit flows for all productive pursuits in manufacturing, agriculture, trade and other service sector. Under the new monetary programme, domestic credit growth will come down to 20 per cent in June 2012 from an estimated 27 per cent in June this fiscal while credit growth to the private sector will be brought down to 18 per cent next fiscal from an estimated level of 25.5 per cent in the current one. Explaining what the central bank would consider lending for speculative purposes in particular, BB Senior Consultant Mr. Allah Malek Kazemi said credit flows for purchases of land and apartments (flats), investments in shares beyond affordable levels and many other areas where bubble-and-bust situations prevail will...
Words: 1315 - Pages: 6
...REPORT ON Monetary Policy of Bangladesh PATUAKHALI SCIENCE AND TECHNOLOGY UNIVERSITY Monetary Policy of Bangladesh SUBMITTED TO M. Kazi Tamim Rahman Lecturer Department of Agricultural Economics and Rural Sociology Faculty of Business Administration and Management SUBMITTED BY Group: 01(Warrior) Level-3, Semester-1 Faculty of Business Administration and Management Name of the students | Reg. No. | Roll No. | Md. Kamruzzaman (L) | 00660 | 01 | Shuvradeb Barai | 00668 | 09 | Abu Zafour | 00680 | 21 | Sahana Parveen | 00666 | 07 | Nazmul Alam Siddiqui | 00565 | 25 | Money and Banking Course code: FBK 312 SUBMISSION DATE: PATUAKHALI SCIENCE AND TECHNOLOGY UNIVERSITY Acknowledgement At first we desire to express our deepest sense of gratitude of almighty Allah. With profound regard we gratefully acknowledge our respected course teacher M. Kazi Tamim Rahman, Lecturer, Department of Agricultural Economics and Rural Sociology, Faculty of Business Administration and Management, for his generous help and day to day suggestion during the preparation of this report. We like to give thanks especially to our friends and many individuals, for their enthusiastic encouragements and helps during the preparation of this report us by sharing ideas regarding this subject and for their assistance in typing and proof reading this manuscript. Table of Contents Chapter – 1 ...
Words: 13748 - Pages: 55
...Monetary Policy Statement (July‐December 2012: H1FY13) Executive Summary This issue of the Bangladesh Bank (BB) half yearly Monetary Policy Statement (MPS) outlines the monetary policy stance that BB will pursue in H1 FY13 (July‐December 2012), based on an assessment of global and domestic macro‐economic conditions and outlook. BB’s monetary policy has two major objectives: (i) maintaining inflation at moderate levels and (ii) supporting inclusive growth objectives of the Government. This MPS was preceded by productive consultations with a range of key stakeholders and web‐based comments were also received. In FY10 and FY11 the global economy continued languishing in the aftermath of the 2009 global financial crisis and BB eased monetary policy in order to limit the impact on the Bangladesh economy. Due to this and other pro‐active measures, the Bangladesh economy emerged largely unscathed from this global crisis, averaging over 6% growth between FY09 and FY11. In FY12 the economy faced a different set of challenges related to rising inflation and balance of payments pressures. In order to address these challenges BB’s monetary stance was more restrained than earlier years and yet able to accommodate a private sector credit growth rate which was more than sufficient to meet the initial GDP growth target. The monetary growth targets set in January 2012 were met and the key outcomes – falling inflation and con...
Words: 4953 - Pages: 20
...Objectives of the paper: With giving an overview of what the monetary policy really is and narrating how the central bank formulates the monetary policies and takes the necessary steps for its implementation in Bangladesh, this paper targets to analyze the impact of monetary policy on the inflationary situation. Methodology: The study depends on I. Extensive literature review of external sources on central banks on formulation and implementation ofmonetary policy for the country II. Publications of Bangladesh Bank Scope of the paper: 1. First of all, monetary policy is a deep sea to swim through. Though Bangladesh practices and implements a limited number of instruments, the mix is always complex to grab the main idea behind it. Extensive analysis of the mix is beyond the scope of the paper. 2. Framing of indices of central bank policies is beyond the limit of this paper. 3. Structured data is hard to collect from the departments of Bangladesh Bank, so complex calculations and data analysis is deliberately avoided. Bangladesh Bank (BB): The central bank of the country, was established as a corporate body by the Bangladesh Bank Order, 1972 (P.O. No. 127 of 1972) with effect from 16 December, 1971 by acquiring the liabilities and assets of erstwhile State bank of Pakistan in East Pakistan. Bangladesh Bank is the central bank of the country | | There is a cross departmental committee on monetary policy (MPD) headed by a deputy governor, which includes the...
Words: 3215 - Pages: 13
...July-December 2011 Monetary Policy Statement July 27, 2011 Monetary Policy Department Bangladesh Bank 1 Monetary Policy Statement H1 FY12 (July December 2011) Executive Summary Introduction: This (twelfth) issue of Bangladesh Bank’s (BBs) half yearly Monetary Policy Statement (MPS) outlines the monetary policy stance that BB will pursue in H1 FY12 in the context of unfolding near term developments in the domestic and global scenes. The ex ante announcements of monetary policy stance are intended to anchor inflation expectations of economic agents and the general public. As with the previous recent issues of MPS, drafting of this issue was preceded by rounds of consultations with stakeholders including trade body representatives, senior professionals and academics, past finance ministers/finance advisers/BB Governors; to glean their perceptions about policy outcomes in the preceding period, as also about the challenges and priorities for the way forward. For the first time, suggestions on monetary policy were also invited and received on BB website. FY11 growth outcome, outlook for FY12: Output and investment activities in the economy paced up substantially in FY11 after a couple of years in post global crisis relative slowdown. The Bangladesh Bureau of Statistics (BBS) estimates real GDP growth for FY11 at 6.66 percent (very close to initial projection of 6.70 percent), following 6.07 percent growth in FY10. Industry sector had the strongest growth gain from...
Words: 6477 - Pages: 26
...Assignment On The Role of Monetary Policy: Bangladesh Perspective * Introduction 3 * Impotance of Monetary Rule 3 * Objectives of Monetary Policy 5 * Functions of Monetary Policy 5 * Economic Growth 6 * Bangladesh Monetary Policy 7 * Note Issuing Processes 7 * The Broad Discussion of Monetary Policy Objective 9 * Strategy of Monetary Policy 11 * Conclusion 13 INTRODUCTION: Monetary Policythe policy adopted by the central bank for control of the supply of money as an instrument for achieving the objectives of general economic policy. With the shifts of the policy stance of the government in various phases, necessary adjustments were made in the country's monetary policy. The Department of Research in the Bangladesh Bank plays an important role in the formulation of economic policies of the country. The principal function of the Department is to help the bank in the formulation of monetary and credit policies and also to assist it in discharging its duty as adviser to the Government on economic and financial matters. To this end, the department keeps the top executives of the bank fully informed of latest economic development both at home and abroad, in a regular and systematic manner. For this purpose the Department keeps a close watch on trends in the domestic economy as well as on international economic developments with particular reference to monetary, fiscal and trade problems...
Words: 3050 - Pages: 13
...central banks should burst bubbles. But, in their view, monetary policy should respond to asset bubbles in a cautious and moderate manner in order to avoid economic distortions. Some others argue against the role of central bank in bursting bubbles. They say bubbles generally arise out of some combination of irrational exuberance, jumps forward in technology and financial deregulation, for which the connection between monetary conditions and the rise of bubbles is tenuous. However, the central bank is at the centre point in this debate. The recent crash in the stock market in Bangladesh is also associated with some policies of the central bank. The aim of this article is to analyse the following two aspects: (i) whether the monetary policy response was appropriate to the rise and the recent collapse of the bubble, and (ii) whether the behaviour of financial institutions was optimal to the policy response. Commercial banks have been involved heavily in the stock market business in the last few years. Allowing merchant banking has exaggerated the situation. They became the key player in the stock market. Undoubtedly, any policies to control banks' exposure to the stock market could have significant impact on the capital market. Monetary easing during last two or more years (money supply was more than 22 percent during the period) could have helped stock market remain buoyant during these days. Perhaps, Bangladesh Bank (BB) was not much aware about banks' exposure to the stock...
Words: 1117 - Pages: 5
...and committed professionals of high ethical standards, conduct monetary management and financial sector supervision to maintain price stability and financial system robustness, support rapid broad based inclusive economic growth, employment generation and poverty eradication in Bangladesh. The mission is to formulate monetary and credit policies, manage currency issue and regulate payment system, manage foreign exchange reserves and regulate the foreign exchange market, regulate and supervise banks and financial institutions and advise the government on interactions and impacts of fiscal, monetary and other economic policies. Bangladesh Bank maintains an interest rate structure that provides fair return on financial assets, supports growth in the real sector and promotes development of markets in bond and securities. The central bank provides precise prudential regulatory, risk management and disclosure framework to protect solvency and liquidity of individual institutions and stability of the overall financial system, acting as lender of last resort if and when needed. The central bank maintains liquidity conditions and credit policies ensuring adequate credit flows at market driven flexible interest rates for all productive economic activities, including in sectors like agriculture, SME, and where markets have not been very responsive. Bangladesh Bank fosters macroeconomic stability through monetary and external sector management. The bank promotes and supports...
Words: 8807 - Pages: 36
... Palli Karma Sahayak Foundation (PKSF), Samabay Bank, Grameen Bank etc., Non Governmental Organizations (NGOsand discrete government programs. The informal sector includes private intermediaries which are completely unregulated. [pic] The financial market in Bangladesh is mainly of following types: Money Market: The primary money market is comprised of banks, FIs and primary dealers as intermediaries and savings & lending instruments, treasury bills as instruments. There are currently 15 primary dealers (12 banks and 3 FIs) in Bangladesh. The only active secondary market is overnight call money market which is participated by the scheduled banks and FIs. The money market in Bangladesh is regulated by Bangladesh Bank (BB), the Central Bank of Bangladesh. Capital market: The primary segment of capital market is operated through private and public offering of equity and bond instruments. The secondary segment of capital market is institutionalized by two (02) stock exchanges-Dhaka Stock Exchange and...
Words: 4761 - Pages: 20
... On “Monetary Policy of Bangladesh” Course Code: MBA 510 Course Title: Macro Economics Submitted to: Professor Abdul Bayes Department of Business Administration East West University Submitted by: Minhajul Abedin ID: 2013-1-95-019 Section: 01 Date of submission: 24 august, 2013 Monetary Policy of Bangladesh Decisions regarding the monetary policy are very important for any country in today’s world. To control the supply of money by targeting a rate of interest, and to promote the economic growth and stability, a good control over the monetary policy is a must for every country. Bangladesh is a developing country and its monetary policies are generated by the central bank of the country. Though the land size of Bangladesh is not that big but in terms of total people, it is a big country relative to other countries. As a developing country it is undertaking so many developments and business projects both publicly and privately. The monetary policy of Bangladesh is playing a pivotal role to control the money supply of the country which in turn is promoting the overall economic growth of the country. This essay briefly discusses about some of the activities of the central bank related with the monetary policy of Bangladesh along with some other primary things which are related to the basic monetary policy. In this essay the “Monetary Policy of Bangladesh” will be presented by following this sequence, 1. A brief overview of monetary policy 2. Objectives...
Words: 3405 - Pages: 14
...On “Monetary Policy of Bangladesh” Course Code: Course Title: Macro Economics Submitted to: Submitted by: Date of submission: 15 August, 2012 Table of Contents |Titles |Page Number | |Table of Contents |02 | |Introduction |03 | |Definition of Monetary policy |03 | |Importance of Monetary Policy |03 | |Type of Monetary Policy |04 | |Tools to implement the monetary policy |04 | |Bodies of Monetary Policy |05 | |Monetary Policy in Bangladesh |05 | |Instruments of Monetary policy in BD...
Words: 2786 - Pages: 12
...------------------------------------------------- The Monetary Policy of Bangladesh Introduction The policy adopted by the central bank for control of the supply of money as an instrument for achieving the objectives of general economic policy. With the shifts of the policy stance of the government in various phases, necessary adjustments were made in the country's monetary policy. The principal function of the Department is to help the bank in the formulation of monetary and credit policies and also to assist it in discharging its duty as adviser to the Government on economic and financial matters. To this end, the department keeps the top executives of the bank fully informed of latest economic development both at home and abroad, in a regular and systematic manner. For this purpose the Department keeps a close watch on trends in the domestic economy as well as on international economic developments with particular reference to monetary, fiscal and trade problems and policies. Domestic and international economic developments are brought within the compass of comprehensive reports and reviews which are submitted for perusal of the Governor, Deputy Governor, and Senior Executives of the bank, as also the bank’s Board of Directors. Monetary Policy Monetary policy is the term used by economists to describe ways of managing the supply of money in an economy. Monetary Policy is the management of money supply and interest rates by central bank to influence...
Words: 3068 - Pages: 13
