'Inclusive' monetary policy unveiled to spur growth
ET Report

Bangladesh Bank on Tuesday unveiled its half-yearly 'inclusive' monetary policy for January-June period of the current fiscal year aiming to contain average inflation under 6.5 percent and bring more people under financial services.
Announcing the policy, Bangladesh Bank governor Atiur Rahman, who termed it inclusive, said: "A major goal of the policy is to bring more people under financial services."
"We want to attain growth through financial inclusion."
He said the policy stance would support achieving highest sustainable output growth without sparking inflationary pressures.
"The efforts would be directed at gearing up economic activities by encouraging adequate credit flows to all productive sectors like farming and small and medium-scale industries to stimulate and expand domestic supply responses," he added.
Earlier the governor said the central bank would continue an accommodative monetary policy to achieve at least 6 percent growth of gross domestic product this fiscal year, and diversify use of resources to reduce poverty, especially in rural areas.
The central bank said Bangladesh is on track to achieve projected growth, up from 5.9 percent in the 2008-09 fiscal year, the slowest pace in five years because of global downturn.
It said that inflation would come down to 6.5 percent this fiscal year, as projected earlier, from around 7 percent in the previous year.
Economists have said inflation, which is rising after hitting 2.3 percent in June 2009, might hold back economic growth. Annual inflation jumped to 6.71 percent in October 2009, mostly due to a steep rise in food costs.
"While build-up of price pressure will be on constant watch, the prevailing supportive monetary conditions will be continued in the second half of 2009/10 to facilitate the recovery in exports and new investments taking firmer roots," the monetary policy statement said.
Export earnings in the first five months of the current fiscal year plunged 6.9 percent to $6.1 billion while remittances hit $5.5 billion in the first half, around 23 percent higher than the previous year.
Export earnings of $17.6 billion and around $11 billion in remittances have been targeted in the current fiscal year to boost foreign inflows into the $80 billion economy.
However, the central bank said growth of foreign exchange reserves, which hit an all-time high of $10.34 billion at end-December, would be slower in the second half of the current fiscal year due to a rising trend of imports.
Exports and remittances from Bangladeshis working overseas are key sources of foreign exchange for the impoverished south Asian country of 150 million people.