Editorial
Macroeconomic management of Bangladesh economy goes on weakening as control over many of the strings tends to loosen as evident from recent quarters’ data. The symptom is manifested by sudden liquidity crisis in the banking sector, falling foreign exchange reserves, depreciating Taka-Dollar exchange rate, deteriorating current account balance and swelling Percentage Share of Classified Loan to Total Outstanding in the face of rising Domestic Credit Flow, particularly in private sector under a regime of tight monetary policy implemented during July-December 2017.
Liquidity crisis has loomed from July-December 2017 tight monetary policy targeted to keep inflation under control. Yet the inflation rate rose from 5.39% in March 2017 to 5.70% in December 2017 reflected mainly in the price hike of coarse rice and other few essential goods such as sugar, peas and onions.
Growth of Broad Money (M2) supply was cut down to only 4.11% during July-December FY17 and 3.93% during July-December FY18 from a high 10.9% in FY17. This resulted in decrease in the growth of Net Foreign Assets of Bangladesh Bank to 7.6% in Q1 of FY18 from 14.8% in FY17. Growth of currency issued by Bangladesh Bank also went down to 12.4% in Q1FY18 from 14.3% in FY17 accompanied by decline in the growth of Deposits of Banks with Bangladesh Bank to 15.5% from 20.5% during the same period. In addition, the period has experienced sliding in the growth of Reserve Money in the central bank to 13.4% from 16.3%.
Against this tight monetary policy, rise in the growth of domestic credit flow by 11.8% in Q1 FY2017-18 from 9.8% during FY 2016-17. One explanation of rising tendency in domestic credit flow is explained by recent falling interest rates from two digits to single digit caused by dearth of investment opportunity in the economy primarily constrained by the impact of stopping new electricity and gas connections to real estate and manufacturing industries sector few years back. This had led to shifting disbursement to the extent in agricultural, SME and industrial term credit during July-December 2017-18.
Of course, ample questions are raised on the procedure and quality of this credit rise. An added concern now is with the upward escalation of lending rate explaining the nature and depth of liquidity crisis in the economy.
An objective and very judicious study of the complexity faced by the economy is needed to devise effective policies to counter current problems including the current liquidity crisis.
The Editor
Vol. 27, No. 03 & 04 ISSN 0256 8586 July-December 2017
Articles
Md. Tauhidul Islam CAMS, CDCS Uniform Shari’ahCompliance: Opportunities and Challenges
Shah Md. Masum BillahImplementation of Females’ Inheritance in Muslim Family Law: Bangladesh Perspective - A Theoretical Analysis
Md. Kamal Hossain FCMA, ACAZakat and Tax: Their Relation and Conceptual clarification in light of Islam.
THOUGHTS ON ECONOMICS
Vol. 27, No. 03 & 04 ISSN 0256 8586 July - December 2017
Md. Tauhidul Islam CAMS, 07Uniform Shari’ahCompliance:
CDCSOpportunities and Challenges
Shah Md. Masum Billah33Implementation of Females’ Inheritance
in Muslim Family Law: Bangladesh Perspective - A Theoretical Analysis
Md. Kamal Hossain FCMA,57Zakat and Tax: Their Relation and
ACAConceptual clarification in light of Islam.
THOUGHTS ON ECONOMICS
Vol. 27, No. 03 & 04 ISSN 0256 8586 July - December 2017
Dr. M. Umer Chapra
Dr. Anas Zarqa
Dr. Fahim Khan
Dr. Monzer Kahf
Dr. Dilwanaz Siddiqi
Prof. Rafiqul Islam Molla
Dr. M. Ataur Rahman
Chief Editor:Shah Abdul Hannan
Editor: Prof. Dr. S.M. Ali Akkas
Member:Prof. Dr.Ayubur Rahman Bhuyan
Member:Prof. Dr. M. Kabir Hassan
Member:Mohammad Nurul Islam
Member:Prof. M. Muzahidul Islam
Member:Dr. M. Nurul Amin
Member:Md. Abdul Awwal Sarker
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THOUGHTS ON ECONOMICS
A Quarterly Journal of Islamic Economics Research Bureau
Vol. 27,No. 03 & 04July - December 2017
ISSN 0256 8586
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