Bangladesh Bank

Monetary Policy Department

Name & Designation Email Telephone Fax
Kazi Sayedur RahmanDeputy Governor
880-2-9530412, 880-2-9530422--
Dr. Md. Ezazul IslamExecutive Director (Research)
Md. Abdul KayumDirector (Research)
The Monetary Policy Department (MPD) of Bangladesh Bank (BB) is responsible to execute all sorts of ground work related to formulation of monetary policy of the Bangladesh Bank. For this purpose, MPD performs various regular jobs at the department level which are summarized below.
  1. MPD prepares Monetary Policy Statements (MPS), currently the yearly release of Bangladesh Bank?s monetary policy stance and monetary program based on the assessment of Bangladesh?s existing monetary and credit situation and macroeconomic developments and near future outlooks in real, external, and fiscal sectors.
  2. MPD formulates money and credit program of the banking system and monitors its? developments accordingly.
  3. MPD arranges Monetary Policy Committee (MPC) meetings once in every month/at least once in each quarter as per instruction of its chairperson (Governor, BB) and prepares working papers and presentations for the meetings. It also prepares minutes of the meetings and circulates it for implementation of the decisions taken by the MPC.
  4. MPD prepares the draft write-up for inclusion as working papers of Council for the Coordination of fiscal, monetary and exchange rate policies meetings organized by the MoF under the provision of section 9A of the Bangladesh Bank (Amendment) Act, 2003.
  5. MPD issues circulars for banks and financial institutions on monetary policy measures such as changes in policy rates/ reserve ratios, Bank Rate etc.
  6. MPD prepares "The Major Economic Indicators (MEI): Monthly Update" for reviewing current economic situation to notify the Board of Directors of Bangladesh Bank and also publishes it through the BB website.
  7. MPD Compiles the data on opening of import LC and probable liabilities against back to back LC received from the authorized dealer banks and incorporates in the Monthly MEI.
  8. MPD prepares background papers on Key Monetary Indicators (KMI) on daily basis for the auction committee's decisions in the meetings for auction of government treasury bills, bonds, and BB bills. These background papers cover ongoing developments in the overall liquidity situation, government's borrowings from the banking system, various components of broad money, reserve money and other macro-economic indicators. MPD also issues press release on the auction results of various bills and bonds on regular basis.
  9. MPD calculates banks? reserves with Bangladesh Bank (in short, reserves with BB) on daily basis by collecting the actual balances of all scheduled banks with different branches of Bangladesh Bank for assessing total liquid assets of the banking system.
  10. MPD calculates excess reserves (reserves with BB minus required reserves) on daily basis with regard to individual bank, group of banks and the banking system of Bangladesh.
  11. MPD forecasts the excess reserves for the next several working days on the basis of actual excess reserves and considering autonomous and policy factors that influence the reserves with BB.
  12. MPD prepares monthly write-up on the Developments of Broad Money (M2) and Reserve Money (RM) against their programmed paths.
  13. MPD calculates nominal effective exchange rate (NEER)? index on daily basis by using bilateral nominal exchange rates of Bangladesh Taka (BDT) against the basket of currencies of major trading partners of Bangladesh.
  14. MPD calculates the real effective exchange rate (REER)? index on monthly basis by using NEER index and the consumer price indices (CPIs) of Bangladesh as well as its major trading partners.
  15. MPD prepares chapter-4 (Money and Credit) and chapter-7 (Financial Markets) of annual report of BB.
  16. MPD prepares fortnightly statement on Trends of Major Economic Indicators covering developments in real and financial sector of the economy for uploading in the BB website and for onward transmission to the MoF and NBR.
  17. MPD analyses borrowings of scheduled banks from Bangladesh Bank on monthly basis.
  18. MPD monitors net international reserves (NIR), reserve money, broad money and the trend of Government?s budget financing from the banking system with a view to observing the deviations of those variables from the set targets.
  19. MPD conducts study on various contemporary issues of monetary and exchange rate policies and any other relevant macroeconomic issues.
  20. MPD provides comments and suggestions on various issues mostly related to monetary and exchange rate policies to different ministries and agencies including the Ministry of Finance of the Government of the People?s Republic of Bangladesh.
  21. MPD prepares the answers to the related questionnaires from different international organizations including the IMF, WB, ADB and SARTTAC.
  22. MPD officials also perform any other jobs as per instruction of the higher authority of BB mostly related to monetary and exchange rate policies.