Bankers at a workshop on monetary policy yesterday said that if the GDP growth rate comes below 6 per cent, it will have psychological effect on the investors and will work as barrier to new investment in the country, reports UNB. “Below 6 per cent GDP growth will create psychological barrier to the investment,” said SA Chowdhury, former chairman of Bangladesh Krishi Bank and also former managing director of Sonali Bank Limited, told the workshop referring to the apprehensions of economists and donor agencies that the GDP growth in the country will go below 6 per cent.
The Institution of Bank Management (BIBM) organised the workshop, with its director general Toufiq Ahmed Choudhury in the chair, at its auditorium in the city.
Expressing concern, most of the speakers at the workshop apprehended that the ongoing political turmoil might affect the macroeconomic stability of the country resulting in lower GDP growth against the targeted 7.3 per cent in the current fiscal year, 2014-15.
Responding to various questions on monetary policy from mid-level bankers representing different banks, Bangladesh Bank chief economist Birupaksha Paul agreed with the idea and said that Bangladesh Bank has been trying to pursue a cautious monetary policy to achieve the growth target keeping the inflation under control.
He admitted that there is frustration among the people about the growing non-performing loan (NPL) and money laundering, which the central bank also feels sharply.
“It’s true, no central bank governor will prefer to receive award keeping its NPL high,” said the BB chief economist adding that control of everything is not in the hands of the central banks in the third-world countries.
Advocating more independence for the central bank, he said the central bank’s independence helps government maintain better coordination in implementing its programmes and policies.
Birupaksha Paul said monetary policy should be placed in Parliament and discussed by its members as it happens in many developed countries.
Former deputy governor of Bangladesh Bank Khondkar Ibrahim Khaled appreciated different aspects of the monetary policy announced by the central bank up to June this year.
Only GDP growth should not be the main indicator of development for a country like Bangladesh, he said, adding food, education and healthcare are also the areas where concentration should be given from humanitarian point of view. 
Khondkar Ibrahim Khaled said money laundering must be checked and steps should be taken so that local money could be invested locally instead of flying overseas.
SA Chowdhury said private sector credit growth is falling for lack of enabling environment as a result of political instability.
“If private credit growth falls, it’ll directly hit macroeconomic stability,” he said, adding that foreign and local investment is essential for creating employment.
Expressing concern about the spillover effect of the proposed wage hike of the government employees, Chowdhury said that when this wage hike comes into effect, it would push up inflation and the private sector will be under pressure to hike their staff salaries as well.