This was an assessment for our course Sessional on Introductory Macroeconomics - Econ 1212. We were group C among 7 groups. We were assigned to summarize the Monetary Policy Statement H2FY24 - Bangladesh Bank and make a slide and assignment on that. Course Instructors: Fahmida Akter Oni ma'am and MD Mehedi Hasan sir. we are, 231502 (Proshanto Majumder), 03 (Progga Haque), 06 (Tasnuba Zarin Topa), 14 (Chandra Kishor Roy), 29 (Fahimur Rahman) from Economics Discipline, Khulna University.

1. Prosanto Majumdar
ID: 231502
Progga Haque
ID: 231503
Tasnuba Zarin Topa
ID: 231506
MD Fahimur Rahman
ID: 231529
Chandra Kishor Roy
ID: 231514
Fahmida Akter Oni
Assistant Professor
MD Mehedi Hasan
Lecturer
Economics Discipline, Khulna University
Course Title: Sessional on Introductory
Macroeconomics
Course Code: 0311 15 Econ 1202
Presented by
Group - C
MONETARY POLICY STATEMENT (MPS)
Presented to
J a n u a r y - J u n e 2 0 2 4

2. Table of
Contents
Whatabouts of MPS
Our Team
Outcomes of H1FY24
National and Global
Contexts
External Sectors
Forward Looking
Initiatives
Monetary and Credit
Projections of H2FY24
Streamlining Open-
market Operations

3. WHATABOUTS OF MPS
Formal release every
year since 2006
Defining Monetary Policy Statement in Bangladeshi Context
Since
• Primary mandate of the Central Bank, published twice a year
• Aims to secure external and internal values of Bangladeshi Taka, while formulating and
executing Bangladesh Bank (BB), our central bank, crafted monetary policies
• Anchors ambivalent macroeconomic conditions and economic metrics (e.g., Inflation,
CPI, GDP, NI, FDI, and etc.
Roles Involved
Policymakers, Think-tank
Economists, Social-welfare
workers, Economics
Journalists, Executives and
BoD of BB
Major Insights
The actual performances of
previous fiscal period/year;
MPS-H2FY24 took from
H1FY24

4. KEYDETERMINANTS IN
THECONCURRENT
PERSPECTIVE
EMPLOYMENT&UNEMPLOYMENT
INFLATION
INVESTMENTTRENDSANDFDI
TRADEFORECASTS
GLOBALANDDOMESTIC
BACKGROUNDS
INTERESTRATESANDCREDIT
PROJECTIONS

5. SIGNIFICANT REVOLVING COMPLEXITIES
External
• Foreign trade
uncertainties
• Geopolitical tensions
(e.g., Russia-Ukraine
War, Afghanistan crises)
• Emerging rivalries
• Vulnerability against
global power-chairs
Internal
• Instability of exchange
rates
• Depreciation with USD
• Increasing inflationary
pressures
• High non-performing
loans
• Rising strain on foreign
reserves

6. Major Initiatives of MPS-H1FY2024
(Implementation of a Contractionary Monetary Policy)
• SETTINGCUMULATIVEBASISPOINTINCREASEOF175INPOLICYRATES(E.G.
SPONTANEOUSLYALLOWINGDEPRECIATIONOFCURRENCYWITHMARKET
FORCES)
• REPLACINGLENDINGCAPWITHSMART(SIXMONTHSMOVINGAVERAGERATEOF
TREASURYBILL)RATE
• CONTINUEDFOREIGNCURRENCYSALESASANAUTOMATICMEASURE
• CREDITFLEXIBILITYSUPPORTFORCMSMESECTORS
• BALANCINGDEMAND-SUPPLYFACTORS- FOCUSINGONAQUALITATIVE
TIGHTENINGINTHEMONEYMARKET

7. Outcome of MPS-H1FY2024
(Implementation of a Contractionary Monetary Policy)

8. Outcome of MPS-H1FY2024
(Implementation of a Contractionary Monetary Policy)
Though less focused on fostering a more productive economic growth, the MPS for H1FY24 still
brought some noteworthy actual outcomes by December 2023 amidst the global economic
uncertainties.

9. Outcome of MPS-H1FY2024
(Implementation of a Contractionary Monetary Policy)
Private and Public Sector Performances
• Public sector experienced a moderation, might not reaching the projection levels, due to the
contractionary monetary policy
• Private sectors showed better metrics than all other South-Asian countries except India,
manifesting our economy’s resilience in broader Asian economic landscape

10. NATIONALANDGLOBALCONTEXTS
SOUTH-ASIA
CONTRIBUTESAPPROX. 2/3
TOTHEGLOBAL
ECONOMIC GROWTH
GROWTHOF 4.2% IS
ANTICIPATED BY2024
AFTERA FLUCTUATIONIN
2023

11. • THEWEOESTIMATESTHEGLOBALGDPTODROPDOWNTO3.0%IN2023,ANDSTAND
AS2.9%BY2024
• GDPS OF ADVANCED ECONOMIES ARE TO DECELERATE TO 2.4% BY 2024 FROM 2.6%
INPOST-COVID19TIMES
• EXCEPT SRI-LANKA AND PAKISTAN, THE OTHER COUNTRIES, INCLUDING OURS,
SOUTH ASIA’S PROJECTED ECONOMIC GROWTH IS QUITE HIGHER THAN
ADVANCEDANDEMERGINGECONOMIES
• DESPITEAMARGINALDECLINEOF-0.5,BANGLADESHPREVAILSITSPROJECTEDGDP
GROWTHRATESURPASSING6%IN2024.
TheResilienceofBangladeshEconomyAmidstTheGlobalCrises
NATIONALANDGLOBALCONTEXTS

12. NATIONAL AND GLOBAL CONTEXTS
INFLATIONARY CONDITIONS
• Since mid-2022, global headline inflation has been stably decreasing
dropping down to 5.8% in 2024 from 8.7% in 2022
• Advanced economies saw a decreased rate of 4.6% by the end of 2023 from
7.3% in 2022
• Developing and emerging economies prevailed a rate of 8.5% in 2023,
projecting 7.8% by 2024

13. • Global coping measures against inflationary
disruptions on interest rates can be:
i) Increasing interest rates (e.g., Japan, India, Pakistan,
and Indonesia)
ii) Decreasing interest rates (UK, USA, Vietnam,
China).
NATIONAL AND GLOBAL CONTEXTS
INTEREST RATE CONDITIONS
• In H1FY24, Pakistan had the highest policy rate of around 23%+
• Sri Lanka showed a fluctuating trend throughout the three following FY
• Other countries ranged between 3.5%+ to 8.5% throughout the period.

14. • Substantial USD sales and high currency-deposit ratio absorbed a massive
Bangladeshi currency DRIED
LIQUIDITY
NATIONAL AND GLOBAL CONTEXTS
LIQUIDITY CONDITIONS
SURGED INTEREST
RATES
THE AVG. CALL MONEY RATE
CLIMBED TO 8.84% IN DEC-
2023 FROM 6.06% IN H1FY23
SMART WILL SURGE THE
YIELD RATE FROM 7.10% TO
8.14% BY THE END OF H2FY24

15. External Sectors
The Outlook
• FACTORS AFFECTING: BALANCE OF PAYMENTS (BOP), GEOPOLITICAL
COMPLEXITIES, GEOECONOMIC TENSIONS, AND GLOBAL MONETARY
TIGHTENING.
• BALANCE OF PAYMENTS: DEMONSTRATED A DEFICIT OF $4.90 BILLION DURING
H1FY24, LESS FROM THE 6.00 BILLION OF DEFICIT IN FY23.
• INTRUMENTS OF POSITIVE FDI INFLOWS: ANTICIPATED MANAGEABLE CAB AND
DECREASED LC OPENINGS, BACKED BY SEVERAL FINANCIAL MANAGEMENT
TOOLS

16. EXTERNAL SECTORS
IMPORTS AND EXPORTS
H2FY24
Resulting Trade Deficit
Export Growth (RMG)
Awards
USD 4.76 billions - H1FY24
USD 11.82 billion - H2FY23
Accounted for 85% of total
exports, experienced an
increase of 2.75% in H1FY24,
resulting at USD 22.23 billion
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Import Growth
Showed a substantially
decreased rate of 21.02%,
standing at USD 27.76 billion
in H1FY24
Remittance Inflows
A surplus of $579
million
Balance of Payments
A deficit of $4.90 billion

17. Capital Market of Bangladesh
A decline of 1.5%
DSEX
GROWTH
Presented By : Larana Corporate
www.reallygreatsite.com
MARGINAL
DSEX INDEX
Reached BDT
780849 crore from
BDT 772078 crore
in H2FY23.
INCREASE
INSURANCE
SECTOR
Highest turnover
share of 25.4%
0.64% increase,
settling at 6,246.50
points

18. Capital Market of Bangladesh
Presented By : Larana Corporate
The daily average turnover,
dropped by 44.80% (BDT 983
crore in Dec-22 to BDT 543 crore
in Dec-23)

19. RECENT POLICY REVIEW
Exchange Rate Stabilization
• Allowing the depreciation of Taka
• Authorizing approved foreign exchange dealers to open RFCD
• Setting new retention limits on exports with Export Retention Quota (ERQ)
• Extending the facility of Offshore Banking Operations (OBO)
• Imposing Ad limits and capping SMART plus 5 percent annum
• Revising the price of USD and EURO under the Green Transformation Fund (GTF)

20. RECENT POLICY
REVIEW
Foreign Exchange Rate
Reserve of USD 27,13 million by
December 2023
[equivalent to 4 months of import]
INTERVENTION OF BB IN
SUPPLY-SIDE SECTORS WITH
MANAGERIAL STRATEGIES AND
DISBURSEMENT OF LOANS
Reserve of 24753.9 million by
June 2023 (as per BPM6)
H1FY24 H2FY23
Improvement
Factors

21. FORWARDLOOKING
INITIATIVES
ANCHORING INFLATION
REASSESSING BOTH
DEMAND-SUPPLY SIDES
REMOVING REMAINING
LENDING RESTRICTIONS
QUANTITATIVE
TIGHTENING
EXCHANGE RATE
UNIFICATION
SECTOR FOCUSED
FUNDING INITIATIVES
REMOVING DEPOSIT RATE
FLOOR

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FORWARD LOOKING INITIATIVES
ENHANCING FINANCIAL INCLUSION
Digitalized Apps
Cashless Society
BANGLA QR CODE,
BKASH, NAGAD, AND
TAKAPAY
UNBANKED, BRANCHLESS,
AND DIGITALIZED EVOLUTION
OF MFS (MOBILE FINANCIAL
SERVICES)
Objective
75% CASHLESS
TRANSACTIONS BY 2027
Services
SAVINGS, LOANS, INSURANCE,
E-WALLETS, AND REMITTANCE
SENDING
‘Binimoy’
AN INTEROPERABLY UNIFIED
ACCESS TO MULTIPLE
DIGITAL PAYMENT SERVICES

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FORWARD LOOKING INITIATIVES
ESCALATING REMITTANCE INFLOWS
Measures
• DUAL INCENTIVE SCHEME
• EXPANDED REMITTANCE
CHANNELS
• STREAMLINED BANKING
REGULATIONS
• SAFEGUARDING REMITTERS’
INTEREST RATES
• PROMOTING OFFICIAL
CHANNELS AND COMBATING
UNOFFICIAL ONES
• ‘PROBASH’ PENSION SCHEME
Roles
BANGLADESH
BANK
+
THE GOVERNMENT
Major Beneficiaries
THE
HARDWORKING
EXPATRIATE
COMMUNITIES

24. • Limitingthemaximumnumberofdirectorsfromthesamefamilyto3from4
• Enabling BB to authorize a written order if any executives of a bank company occur
miscreants
• Introducing Prompt Corrective Action (PCA) framework to enable timely regulatory and
supervisoryintervention
• IntegratingRiskBasedSupervision(RBS)intoaFYP,enactingfrom2025
FORWARDLOOKING POLICY INITIATIVES
INTEGRITY IN ECONOMICGOVERNANCE
BB’s vigilant and prudent measures addressing the issues signifies lessened
potentialcriseswithintheeconomy,astherewillbehonestyandefficiency

25. • Thereporateisthepolicyrate
• Thecallmoneyrateisthepolicyrate
• SLF (Standing Lending Facility) is the upper limit in
IRC-InterestRateCorridor
• SDF(StandingDepositFacility)thelowerlimitinIRC
STREAMLINING OPEN MARKET OPERATIONS
BB is now targeting to maintain the proximity of
call money rate in the challenging economic
conditions
FROM JUNE 2023
(ENACTED FROM
H1FY23)

26. MONETARY AND CREDIT PROJECTIONS FOR H2FY24 (JULY-2024)
PRIORITIZING
“CONTROLLINGINFLATION”
MODERATIONOFINFLATION
AT7.5%
REALGDPGROWTHTARGET
6.5%
APPLICATIONOFA
“CRAWLINGPEGSYSTEM”
Newly occupied system: Interest Rate Targeting Framework
Guidelines adapted from: The IMF

27. Thank You for Your Attention