NewAge, September 18, 2007
The Bangladesh Bank governor, Salehuddin Ahmed, on Monday said the bank was not going to further tighten its monetary policy as per the prescription of the International Monetary Fund to curb inflation. ‘We are not tightening the monetary policy further as per their prescription… what they are saying is not important, we’ll take our own decision,’ he told reporters, following a meeting with a visiting IMF delegation at the Bangladesh Bank conference room.
The IMF delegation, led by the IMF adviser for Asia Pacific Department, Thomas Rumbough, will conclude its two-week mission in Bangladesh today, reviewing the economic situation of the country, particularly in the changed circumstances. Salehuddin said the bank had made it clear to the IMF delegation that rising inflation was obviously a challenge for the country, but at the same time economic growth was also a matter of concern.
‘It’ll not be acceptable to us if growth is hampered due to measures taken to tackle inflation,’ he said, adding that the central bank would take any monetary policy measures necessary to invigorate the private sector.
‘We’re not tightening the monetary policy, but trying to utilise the excess liquidity in the banking system,’ he said, stressing the need for private sector development and employment generation. He listed inflation, post-flood rehabilitation, employment creation and private sector development as the major economic targets at present.
Replying to a question, the central bank governor said the issue of corporatising the nationalised commercial banks had now changed with the changed perspective of selling out the Rupali Bank.
He, however, said all the issues under review, including inflation, would be clearer during October-November period when they would review the situation again as part of their regular job. Replying to another question, Salehuddin made it clear that the government was not going to sign any deal with IMF this time.
A senior Bangladesh Bank official said the government had already said no to the policy support instrument agreement with IMF and they were now negotiating with the government on the possibility of extending the Poverty Reduction Growth Facility.