Strict implementation of monetary policy will help private sector: DCCI
Higher credit flow to public sector can constrain credit flows and investment to the private sector, he said
Strict implementation of the new monetary policy for the fiscal year 2022-23 (January-June) will help the private and financial sectors to rebound amid the economic downturn, said Dhaka Chamber of Commerce and Industry (DCCI) President Barrister Sameer Sattar.
He said this while responding to the policy announced by Bangladesh Bank aimed mainly at taming inflation and stabilising foreign exchange reserves, according to a press release.
In the new policy, the central bank has revised the public sector credit growth target up to 37.7%, which can constrain new credit flows and investment to the private sector, the DCCI president said, adding that the government needs to take strict measures to ensure good governance and at the same time reduce public expenditure.
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Barrister Sattar, however, expressed satisfaction at the Bangladesh Bank's decision to introduce a uniform exchange rate by the end of the current financial year to stabilise the dollar market.
He also welcomed the central bank's decision to strengthen surveillance before clearing import expenses through letters of credit (LC) to prevent trade-based money laundering.
The DCCI president believes that it would also help prevent money laundering if the LCs, worth more than $3 million, could be cleared upon investigation.
Sameer Sattar suggested that the LC margin conditions on consumer goods should be relaxed in the current economic situation.
He welcomed the formation of a refinancing scheme worth TK 50,000 crore so that the agriculture, CMSME and import substitute industries can take loans on easy terms.
Barrister Sattar expected that Bangladesh Bank would take some more constructive steps to control non-performing loans (NPLs) as reducing such loans is very important for economic stability.
The DCCI president considers the decision to form a "Special Monitoring Cell" by the central bank to continuously monitor large and non-performing loans as a commendable initiative.
Overall, Barrister Sattar believes that the announced monetary policy has several positive directions to address the prevailing economic challenges.
He hoped that a timely implementation strategy through concerted efforts of the public and private sectors and strict monitoring by the central bank could achieve the key objectives of the currency market and the economy.
