Bangladesh Bank (BB) is set to announce two major policies ahead of the festival vacation for Eid-ul-Fitr, starting on July 28.

The central bank will announce the agriculture and rural credit policy for 2014-15 financial year (FY15) tomorrow (Monday), BB General Manager AFM Asaduzzaman told BSS on Saturday.

He said the BB would also announce its monetary policy statement (MPS) for the first half of the current FY15 on Sunday, July 27. Governor Dr Atiur Rahman would unveil the MPS at 11:30am at a press conference at the central bank headquarters in the capital city. The central bank is preparing the new MPS with special focus on some measures for increasing credit flow and spurring local and foreign investment, a BB official told BSS earlier. “There will be some measures to cut lending rate to create more demand for credit in the market,” he said.

Accordingly, he said the interest on bank’s deposit would also be reduced to protect the interest of both the people and banking sector.

The central bank in its two past MPS kept private sector credit growth to 16.5 percent to manage inflation at a comfortable level, which had been soaring due to high food prices. The inflation at the end of June dropped to a 17-month low of 6.97, creating the scope for credit expansion particularly to the productive sectors.

It, however, would prefer small and medium enterprises and similar sectors for credit expansion so money circulation on the market would not increase from non- productive spending, the BB official said. Besides, the central bank is expecting that the current trend of export and import would also help increase credit flow to private sector in the coming days.

The official said that the new MPS would have some measures to create scope of offering incentives to encourage both local and foreign investment. Economists, think-tanks and development partners earlier cautioned that the economy in the next few years would bump into some major challenges. The challenges are driving forward the country’s industrial sector by continuously attracting domestic and foreign investment.

Keeping in mind the long term goal of mobilizing investment from internal and external sources, the next MPS would propose incentive measures for investment in the productive sector, but with a balanced approach so the incentives would not hinder the growth of existing industries, the official said.

Apart from these new measures, the official said that the next MPS would stick to the old strategy to complement the fiscal measures, announced in the national budget for FY15.