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
- 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.
- MPD formulates money and credit program of the banking system and monitors its? developments accordingly.
- 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.
- 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.
- MPD issues circulars for banks and financial institutions on monetary policy measures
such as changes in policy rates/ reserve ratios, Bank Rate etc.
- 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.
- 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.
- 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.
- 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.
- 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
- 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.
- MPD prepares monthly write-up on the Developments of Broad Money (M2) and
Reserve Money (RM) against their programmed paths.
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.
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.
MPD prepares chapter-4 (Money and Credit) and chapter-7 (Financial Markets) of annual report of BB.
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.
MPD analyses borrowings of scheduled banks from Bangladesh Bank on monthly basis.
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.
MPD conducts study on various contemporary issues of monetary and exchange rate
policies and any other relevant macroeconomic issues.
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.
MPD prepares the answers to the related questionnaires from different international
organizations including the IMF, WB, ADB and SARTTAC.
MPD officials also perform any other jobs as per instruction of the higher authority of BB
mostly related to monetary and exchange rate policies.