Monetary Policy, Inflation and Liquidity Crisis
Bangladesh Economic Update, July 2011
The current issue of the Bangladesh Economic Update focuses on the recently announced six-monthly policy statement (MPS) for the period of July – December of 2011.
The report suggests that the policy instruments enlisted such as hikes of CRR, repo rates induce cost of capital, and thereby may dampen investment, by increasing the cost of capital as the banks borrow at higher rates. Therefore, the central bank’s expectation of reduction of pressure on liquidity may not be materialised...