State of the Bangladesh Economy in FY2021-22
Independent Review of
RBD
Bangladesh's Development
Analysis of External Sector Performance
☐ The strategy being pursued by BB with a view to arresting the
depreciation of the BDT is a logical step in the present context
➤ While gradual depreciation of BDT, in view of aggressive depreciation policy
pursued by its competitors, is a desirable medium-term strategy, given the
current context of high global commodity prices and the likelihood of imported
inflation, BB will need to exercise caution as to what extent this should be
allowed
The forex reserves are (still) at comfortable level (about 6 months'
equivalent of imports even if the current import growth persists)
➤ The Bangladesh Bank thus has some leveraging power to exercise
□ However, by selling dollars BB is also mopping up money from the
market
➤ The credit uptake growth is still below the monetary target of 14.8% (at present
private sector credit growth is less than 10%) and the central bank should not
be seen as crowding out the private sector from the credit market
CPD (2021): State of the Bangladesh Economy in FY2021-22 (First Reading)
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