Monetary policy transmission in Bangladesh: Exploring the lending channel

Sadia Afrin

    Research output: Contribution to journalArticle

    Abstract

    The monetary policy transmission mechanism of Bangladesh, especially the lending and exchange rate channels remain largely unexplored during the period of market based monetary policy instruments and the managed float exchange rate regime. This paper analyzes these transmission channels and finds that the monetary aggregates targeting framework is still effective in influencing price level. Bank lending plays a non-trivial role, while the exchange rate channel is less effective in the transmission process, suggesting a high degree of intervention in the foreign exchange market. External shocks appear important for the macro aggregates and domestic credit boom appear inflationary, in which the central bank plays a stabilizing role.
    Original languageEnglish
    Pages (from-to)60-80
    JournalJournal of Asian Economics
    Volume49
    DOIs
    Publication statusPublished - 2017

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