BB sets higher credit target for public sector

Bangladesh Bank today released its Monetary Policy Statement for six months
setting higher credit target for public sector than private sector despite a
sign of fall in investment. The central bank hiked the credit target for
public sector by about 3.40 percentage point and for private sector by 1.70
percentage point. Governor Atiur Rahman at a press conference at Bangladesh
Bank said there was enough money in the banking system and there would be no
shortage of money for the private sector. He said private sector never
complained about credit crunch. "If private sector needs more money, the BB
has sufficient money to meet their demand." According to the monetary policy
statement, Bangladesh Bank eyes 16. 70 percent growth of private sector
credit in June 2010. In December 2008 , the growth was 21.77 percent and it
came down to 16.23 percent in May. "Indeed, in situations like the present
slack in private sector investment activities, expanded public sector
borrowing for development activities is actually helpful, putting the
liquidity overhang to good use in pacing up growth momentum," said the
statement. BB governor Atiur Rahman also said, "if good investment proposal
is available, money would not be a problem. If necessary, assistance would
be given from foreign currency reserve."