Bangladesh to maintain restrained monetary policy

The central bank of Bangladesh announced on Thursday it will maintain a restrained monetary policy for the second half of the current fiscal year ending June 2015.

The half yearly monetary policy is designed to support the government's policies and programs in pursuit of faster inclusive economic growth and poverty reduction, central bank Governor Atiur Rahman said at a press conference.

According to the bank's Monetary Policy Statement, the persisting inflationary pressures over the past few months with the risks ahead related to the inflation outlook imply that achieving the 2014-15 fiscal year inflation target will be challenging.

The central bank governor blamed the renewed political unrest for the Customer Price Index to have remained above the targeted ceiling.

Bangladesh's opposition parties have been observing a nonstop blockade across the country since Jan. 6, demanding fresh elections under a non-party caretaker government system.

Innocent people were killed when petrol bombs were thrown at motor vehicles during the protest campaign.

Against this backdrop, Bangladesh Bank has decided to keep policy rates unchanged, the statement said.

The ceiling for private sector credit growth of 15.5 percent has been kept well in line with economic growth targets, and this level is sufficient to accommodate any substantial rise in investment and trade-finance over the next six months, it added.

Rahman said imports have recovered from growth sluggishness over the past couple of years.

"The welcome trend of recovery in momentum of investment and output activities in the first half of the 2014-15 fiscal year strengthened optimism of achieving GDP growth (6.5 percent-6.8 percent)." Endi