The Parliamentary Standing Committee on the Finance Ministry on Sunday held its first to review Bangladesh Bank’s monetary policy framework and discussed the future direction of monetary policy including a gradual transition from the existing interest rate-targeting framework to an inflation-targeting regime.

The meeting chaired by Committee Chairman Mushfiqur Rahman was held at the Jatiya Sangsad Bhaban.

At the meeting, Bangladesh Bank delivered a detailed presentation on its monetary policy, outlining the existing policy framework, its implementation and future priorities.

Following the presentation, the committee members held extensive discussions on the issues raised and exchanged views on the country’s monetary policy and financial sector.

According to the presentation, an appropriate monetary policy framework is indispensable for achieving the government’s vision of transforming Bangladesh into a trillion-dollar economy.

To support that goal, Bangladesh Bank highlighted the need for a gradual transition from the current interest rate-targeting monetary policy framework to an inflation-targeting framework.

The central bank noted that a number of emerging economies have successfully stabilised inflation in recent years by adopting inflation-targeting monetary policy frameworks.

Bangladesh could also move in that direction through the gradual adoption of a similar framework, it said.

As part of the proposed transition, the presentation suggested that the Bangladesh Bank Order, 1972 could be amended to make it more contemporary and better suited to the requirements of an inflation-targeting monetary policy regime.

The committee members discussed the presentation in detail and sought clarifications on various aspects of the proposed policy direction and the implementation of monetary policy.

They also exchanged views on issues relating to macroeconomic stability, inflation management and the role of the central bank in supporting sustainable economic growth.

Finance Minister Amir Khosru Mahmud Chowdhury attended the meeting as a member of the committee.

Chief Whip Md Nurul Islam, State Minister for Local Government, Rural Development and Cooperatives Mir Shahe Alam , and committee members Md Jalal Uddin, Moinul Islam Khan, Md Shahadat Hossain, Md Saiful Alam, Syed Zainul Abedin, and Md Abul Hasnat, also participated.

The meeting was also attended by the Secretary of the Financial Institutions Division, the Secretary of the Internal Resources Division, the Acting Chairman of the National Board of Revenue (NBR), senior officials of the Finance Ministry and its divisions, and officials of the Jatiya Sangsad Secretariat.

No formal recommendations or decisions were announced after the meeting.