News
Reaction on Monetary Policy
As one of the leading representatives of the private sector, Dhaka Chamber of Commerce & Industry (DCCI) has expressed grave concern and disappointment over central bank’s decision to maintain contractionary monetary policy solely in the name of controlling inflation. The reality, however, tells a different story. Despite prolonged tight monetary conditions, inflation has not been effectively contained, proving that this tool has largely failed while inflicting serious damage on productive economic activities.
Private sector credit growth has fallen to a 22-year low, sharply declining to just 6.1% in December, 2025. This severe slowdown reflects constrained liquidity, elevated interest rate, and an increasingly high cost of borrowing that are choking entrepreneurship, industrial expansion and job creation. At the same time, private sector investment is on a clear downward trajectory, declining from 24.18% in FY2023 to 22.48% in FY2025, reinforcing concerns that prolonged monetary tightening is discouraging long-term investment decision. Bangladesh economy cannot growth with this tightened fist monetary policy. It is worth mentioning that Broad money (M2) growth increases from 7% in Jun 2025 to 9.6% by December, 2025, indicates monetary expansion and raising questions about the effectiveness of monetary tightening.
Export performance also signals growing stress. During the last six months, total export experienced persistent negative growth in subsequent months, plunging to (-14.25%) in December 2025, indicating weakening external demand and competitiveness amid high financing cost.
DCCI firmly believes that growth, employment, and investment cannot be revived under an excessively restrictive monetary regime. We look forward to the next elected government adopting a more pragmatic and growth-supportive policy framework coordinating the fiscal and monetary policy, ensuring flexible liquidity availability, reduced borrowing cost and a balanced approach that supports both macroeconomic stability and economic recovery in the days to come.
Published on: 2026-02-09