SUMMARY

This is the eleventh issue of Bangladesh Bank’s half yearly Monetary Policy Statement outlines
which Bangladesh Bank will take up in second half of fiscal year 2011 to undergo the
government’s goals of rapidly comprehensive economic growth and poverty diminution
including maintaining monetary and price constancy. The Monetary Policy Statement for second
half of fiscal year 2011 is based on advancement during the earlier half.

The performance seen in the agricultural sector in the last fiscal year has continued in the first
half of current fiscal year under gentle climatic conditions, aided by definite supporting hands of
the agricultural ministry and Bangladesh Bank in ensuring sensible and plenty access to required
inputs and financing. Though official estimates are not available yet, periodic information from
around the country indicates excellent overall growth in rice output. Strong 41 percent growth of
exports in the first half of current fiscal year point toward recovers in output activities catering to
export demand. Strong expansion in import of capital equipment and manufacture inputs indicate
good spirits in output activities for domestic demand as well. Except for unexpected new
difficulties, the economy looks well balanced to reach the 6.7 percent real GDP growth targeted
for fiscal year 2011, as also to jump onward to growth performance well beyond seven percent in
the next fiscal year. As in first half, mounting trends in global prices of food, energy and
industrial commodities remain the near term outside source of concern impacting domestic
inflation in the second half of fiscal year 2011 and beyond. Food crop growers get some price
funding for fertilizers and irrigation fuel, but they are also facing higher costs in extensive real
rise in wages of agricultural laborers in recent years.

Foreign exchange markets in fiscal year 2010 dried up in first half of fiscal year 2011, and
irregular affairs of liquidity tightness needed Bangladesh Bank’s horizontal involvement by
means of repo and USD sales as economic activities bouncing back strongly and declining
growth in workers’ remittance inflows. Even though strong export growth recovered, parallel
growth rebound in imports from a superior stand with remittance inflows outstanding level has
caused some decline of Taka against USD and will keep NFA growth in fiscal year 2011 low, as
was anticipated in the monetary program announced in July 19 Monetary Policy Statement.

After the worldwide financial crisis and economic slowdown in good shape without trailing
footing on growth path, Bangladesh economy is now well balanced to embark on a higher
growth path aspired for in the medium term perception plan. There are of course challenges like
slowdown in manpower exports and slow healing in goods exports to conventional Western
markets, but also opportunities to take advantage of in newer markets in fast growing economies
in Asia and elsewhere.