Bangladesh
Bank Monetary
Policy
(July-December,
2014)
Component
s
Monetary
Policy
Expansionary &
Contractionary
Policy
Components of
monetary policy
Required Reserve
Ratio & Discount
Window Lending
Rate
Open market
Operations &
Moral Suasion
Statement
Summary
regulates the supply of
money by targeting
inflation rate or interest
rate of a country to
assure price stability
contribute to economic
growth
assurance of low
unemployment
ensure predictable
exchange rates with
Component
s
Monetary Policy
Expansionary
&
Contractiona
ry Policy
Components of
monetary policy
Required Reserve
Ratio & Discount
Window Lending
Rate
Open market
Operations &
Moral Suasion
Statement
Summary
increases the total supply
of money in the economy
more rapidly than usual.
expands the money
supply more
slowly
than usual or even shrinks
it.
Component
s
Monetary Policy
Expansionary &
Contractionary
Policy
Components
of monetary
policy
Required Reserve
Ratio & Discount
Window Lending
Rate
Open market
Operations &
Moral Suasion
Statement
Summary
Setting the required
reserve ratio
Setting the discount
window lending rate
Open market
operations
Moral suasion
Component
s
Monetary Policy
Expansionary &
Contractionary
Policy
Components of
monetary policy
Required
Reserve
Ratio &
Discount
Window
Open
market
Lending
Rate
Operations &
Moral Suasion
Statement
Summary
limits the amount of money
available in the economy by
preventing banks from
creating more money than the
Central Bank desires.
rate at which the Central Bank
makes loans exclusively to
other registered banks in
times of financial and banking
instability.
Component
s
Monetary Policy
Expansionary &
Contractionary
Policy
Components of
monetary policy
Required Reserve
Ratio & Discount
Window Lending
Rate
Open
market
Operations
& Moral
Statement
Suasion
Summary
buy and sell securities to and
from the public and banks in
what is known as Open market
operations.
encouraging people to take
certain actions that have
certain effects on the economy.
This is generally the one with
the least determinate effect and
is heavily laden sociologically.
Component
s
Monetary policy aims to limit
reserve money growth to
Monetary Policy
15.5% and broad money
Expansionary &
growth to 16% by December
Contractionary
Policy
2014
Components of
The MPS has aimed average
monetary policy
Inflation bringing down
Required Reserve
below 6.5% by June 2015
Ratio & Discount
Window Lending
The policy emphasizes more
Rate
qualitative support and less
Open market
Operations &
on quantitative support
Moral Suasion
Statement
Summary
Component
s
Policy rate is kept unchanged
(7.25%)
Monetary Policy
Private sector credit growth
Expansionary &
target is target was 16.5%
Contractionary
Policy
The size of the Export
Components of
Development Fund is raised
monetary policy
from $1.2 billion to $1.5
Required Reserve
billion and the single party
Ratio & Discount
Window Lending
ceiling of that fund is raised
Rate
from $12 million to $15
Open market
Operations &
million.
Moral Suasion
Statement
Summary
Component
s
foreign investors are allowed to
Monetary Policy
Expansionary &
Contractionary
Policy
Components of
monetary policy
Required Reserve
Ratio & Discount
Window Lending
Rate
Open market
Operations &
Moral Suasion
Statement
Summary
source term loans from local
banks
the policy gave Importance on
under-served clients, government
and business payments by mobile
phone financial services, close
monitoring of SME and
agricultural credit
this policy mentioned strictly
following the applied ceilings on
loan growth
Component
MPS gave importance on
s
Monetary Policy
Expansionary &
Contractionary
Policy
Components of
monetary policy
Required Reserve
Ratio & Discount
Window Lending
Rate
Open market
Operations &
Moral Suasion
Statement
Summary
appropriate regulatory
and policy framework
and mentioned longer
term savings like pension
and provident funds as a
tentative debt market
participant
