The Reserve Bank of India (RBI) made several changes to monetary policy measures in 2011-12, including hiking repo and reverse repo rates, adjusting reserve requirements, and revising economic projections. Specifically, the RBI hiked repo rates by 0.5% and then later by 0.25%, increased the cash reserve ratio by 0.5%, and revised GDP growth projections downward from 8% to 7% while inflation projections rose from 6% to 7%. Throughout 2011-12, the RBI made adjustments to key policy rates and reserve requirements in response to economic conditions while revising its forecasts for GDP growth and inflation.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Signature content of MTBiz is its Article of the Month (AoM), as depicted on Cover Page of each issue, with featured focus on different issues that fall into the wide definition of Market, Business, Organization and Leadership. The AoM also covers areas on Innovation, Central Banking, Monetary Policy, National Budget, Economic Depression or Growth and Capital Market. Scale of coverage of the AoM both, global and local subject to each issue.
MTBiz is a monthly Market Review produced and distributed by Group R&D, MTB since 2009.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Signature content of MTBiz is its Article of the Month (AoM), as depicted on Cover Page of each issue, with featured focus on different issues that fall into the wide definition of Market, Business, Organization and Leadership. The AoM also covers areas on Innovation, Central Banking, Monetary Policy, National Budget, Economic Depression or Growth and Capital Market. Scale of coverage of the AoM both, global and local subject to each issue.
MTBiz is a monthly Market Review produced and distributed by Group R&D, MTB since 2009.
Comparative Study of Monetary Policy Statements of Bangladesh Bank for the Fi...Md. Nazmus Sakib
The slides delve into comparative study on two monetary policy statements for the Fiscal Year 2016 prepared by Bangladesh Bank. Studying the two monetary policy statements I have found some distinguishing features in the two monetary policy statements that were prepared for the same Fiscal Year. The target and achievement have been delineated. Some findings are showcased here with some recommendations.
1. MONETARY POLICY 2011-12
Repo rate hiked by 50 bps from 6.75% to 7.25%
Reverse Repo rate hiked by 50 bps from 5.75% to
6.25% (dependent
variable on the Repo rate – 100 bps below the Repo
rate)
CRR kept unchanged at 6%
SLR kept unchanged at 24%
GDP growth projection for FY 2011-12 placed at
around 8% (in the range of 7.4% and 8.5%)
2. CONT-
FY 2011-12 March end WPI inflation baseline projection
placed at 6% with an upward bias
M3 growth projected at 16%, deposit growth at 17% and
non-food credit growth at 19%
Bank rate kept unchanged at 6%.
MSF introduced at 1% above the Repo rate (8.25%)
LAF corridor width set at 200 bps (with base at reverse
repo – 6.25% & ceiling at MSF – 8.25%)
MP 2011-12.docx
3. FIRST QUARTERLY REVIEW
Increase / (Decrease) At present
since March 2010
Repo Rate .5%
8%.
Reverse Repo Rate .5%
7%
Cash Reserve Ratio Unchanged 6%.
Statutory Liquidity Unchanged 24%
Ratio
Bank Rate Unchanged
6%
4. KEY FEATURES
GDP growth projection for FY 2011-12 kept unchanged at
around 8%
Inflation projection for March end FY 2011-12 revised
upwards to 7% from 6%
5. SECOND QUARTERLY REVIEW
Increase / (Decrease) At present
Repo Rate .25%
8.5%
Reverse Repo Rate .25%.
7.5%
Cash Reserve Ratio Unchanged
6%
Statutory Liquidity Unchanged
24%
Ratio
Bank Rate Unchanged
6%
6. KEY FEATURES
RBI lowered the growth forecast for 2011-12 from 8%
to 7.6% (in line with our expectations)
Inflation forecast is kept at 7% by Mar-12 end.
Money supply and Credit growth maintained at 15.5%
and 18% respectively
Depreciation of the rupee has emerged as another risk
for inflation.
Indian economy continued to face suppressed inflation
as prices are administered in petroleum sector.
7.
8. Increase / (Decrease) At present
Repo Rate Unchanged
8.50%
Reverse Repo Unchanged
7.50%
Rate
Cash Reserve .50%
5.50%
Ratio
Statutory Unchanged
24.00%
Liquidity Ratio
Bank Rate Unchanged
6.00%
9. KEY FEATURES
The drop in November 2011 WPI inflation to 9.11%, mainly due
to softening in food inflation (4.35% for the week ended
December 3, 2011)
GDP growth rate has fallen to 6.9% from 7.7%(expected in Q2)
Due to sharp moderation in industrial growth to
-5.1%
The fiscal deficit at 74.4% of budgeted 2011-12 was
significantly higher than 42.6% in 2010-11
10. CONT-
FDs (Fixed Deposits) are offering interest
in the range of 7.25% - 9.40% p.a.
Projection of GDP growth for 2011-12 is
revised downwards from 7.6% to 7%.
In reducing the CRR,INR 320 bn of
primary liquidity will be injected into the
banking system