The Dhaka Chamber of Commerce and Industry expressed concern over the Bangladesh Bank鈥檚 decision to maintain a contractionary monetary policy in the second half of the 2024-25 financial year, keeping the policy rate at 10 per cent.
In a statement sent to the media, the chamber said that while aimed at curbing inflation, this rigid stance hampered private sector credit growth and economic expansion. The private sector relies heavily on banks for investment, and high interest rates raise production costs, fueling inflation.
鈥楧espite inflation easing to 9.94 per cent in January 2025 from 10.89 per cent in December 2024, it remains above the desired level,鈥� said the trade body.
Moreover, the DCCI also expressed concern about the decision to maintain the private sector credit growth target at 9.8 per cent for January-June FY25, while actual growth fell to 7.3 per cent in the first of 2025, the lowest in 12 years.
Meanwhile, public sector credit growth surged from the 14.2 per cent target to 18.1 per cent in December 2024, requiring curbs through austerity measures.
Credit growth must reach double digits to restore private sector confidence and business operations.
DCCI urges Bangladesh Bank to introduce sector-specific funds and entrepreneurial support programs to boost credit flow, as restrictive monetary policies risk further economic stagnation.
Though the central Bank implemented the market-based exchange rate, traders (export and import) had to buy the US dollar at a higher price with different rates.
They also urge to address the discrepancy to ensure consistency, benefiting all stakeholders, including traders and remitters.
DCCI criticizes Bangladesh Bank for not taking sufficient steps to strengthen banking governance amid the liquidity crisis and rising NPLs. While the adoption of the ECL methodology under IFRS 9 from 2027 is a positive move, there is a limited focus on implementing governance.
DCCI said that without stronger governance and faster legal resolutions, the banking sector will remain vulnerable, hindering private sector growth and economic resilience.
DCCI also urged the central bank to adopt a more flexible and balanced monetary policy, closely monitor its impact on inflation and growth, and implement targeted measures to boost private sector credit flow.
It said that Bangladesh can achieve its economic growth and stability by fostering a conducive environment for investment and ensuring macroeconomic stability in the future.
