Where The Monetary Policy Needs To Be Pro- Active

Abstract

This article, written by Prof. Dr. M. Azizur Rahman, argues that Bangladesh's monetary policy must be more proactive and closely coordinated with fiscal policy to navigate "extra-ordinary times". The author contends that the fundamental goals of monetary policy enhancing GDP, creating jobs, and ensuring regional equity are being hindered by infrastructural bottlenecks, such as inadequate gas and electricity. A central theme of the article is the critique of "market failures" and the "collusive attitude" of business syndicates, which Rahman identifies as the true drivers of inflation rather than mere money supply. He advocates for a policy that promotes the supply of goods and services while controlling credit to a "reasonable extent" for optimum resource utilization. Furthermore, the author calls for the Bangladesh Bank to exercise caution against unnecessary expansion but emphasizes that credit should not be denied to legitimate economic operators. The piece concludes by highlighting the need for capital market reform to move away from "gambling practices" and move toward productive investment.