Economists and businesses urged the central bank to formulate a time befitting monetary policy with supply of adequate liquidity in a bit to help businesses from the disaster of Covid-19 and to rehabilitate productivity of the economy.

The Bangladesh Bank Governor Fazle Kabir is likely to unveil the monetary policy for the current fiscal year next week.

Businesses hope that the policy would formulate to open the door for reviving the enterprises through new investments by paving way of private equity funds, venture capital and debt equity conversion.
The policy should introduce a rescue package for those businesses affected by the Covid-19 pandemic, the economists said.

Dr Ahsan H Monsur, Executive Director of Policy Research Institution, told , "The next monetary policy should be expansionary to face the ongoing pandemic situation and to remove liquidity crisis."

The central bank has to take the initiative to support government by borrowing money along with the private commercial banks, he said.
He further said that the policy should introduce a credit guarantee scheme for the commercial banks. The central bank should take at least 50 per cent risk-sharing measures to encourage banks to implement the package.

Shams Mahmud, President of the Dhaka Chamber of Commerce & Industry (DCCI), said the policy should take initiative to gear up credit growth to the private sector, especially in the Cottage, Micro, Small and Medium Enterprises (CMSMEs), the worst hit sector by the ongoing pandemic.

It should take measures to keep stable exchange rates to facilitate the country's exporters and to implement export target. A stable exchange rate helps enterprise and financial institutions in evaluating the performance of investments, financing and hedging and thus reducing their operational risks, he said.

They further said the policy should also focus on controlling inflation rate and the rate should be kept below 5 per cent. The annual inflation rate rose to 6.02 per cent in June as demand improved with the easing of lockdown restrictions.

The next monetary policy should take measures so that the commercial banks lend money to the private sector instead of the Treasury bill. The Bangladesh Bank will have to adapt to new strategies and use financial markets to ensure supply of required liquidity for reducing Covid-19 consequences and avoiding financial meltdown, he said.

Exports and sick industries as well as other sectors including agriculture sector need special refinancing facilities to survive, the DCCI president said.