BB's monetary policy meeting deferred as panel member Sadiq Ahmed resigns

A crucial meeting of the Monetary Policy Committee (MPC) of Bangladesh Bank to consider a reduction in policy interest rates has been postponed, amid the resignation of prominent economist Sadiq Ahmed from the committee.

Newly appointed Governor Md Mostaqur Rahman had convened the meeting for Wednesday (March 4) with the intention of reviewing the policy rate and easing borrowing costs. 

According to officials familiar with the matter, the Governor had proposed a modest reduction of between 25 and 50 basis points in a bid to stimulate credit growth and ease pressure on businesses facing high financing costs.

However, the meeting was called off at short notice. Officials indicated that it may now be held after Eid, though no revised date has been formally announced.

The postponement comes against the backdrop of Mr Ahmed's resignation from the seven-member MPC. Mr Ahmed, Vice-Chairman of the Policy Research Institute (PRI) and a former senior World Bank official, was the only committee member nominated by the central bank's board of directors. 

His departure has added an unexpected twist to what was expected to be the new Governor's first major monetary policy move.

While the precise reason for the postponement has not been officially confirmed, senior officials suggested that differing views over the timing of a rate cut - particularly amid persistently high inflation - may have contributed to the development.

Bangladesh has been grappling with elevated consumer prices, and any move to ease policy rates at this juncture would likely have triggered debate within policy circles. Critics argue that premature monetary easing could undermine inflation control efforts and put further pressure on the exchange rate, while proponents believe calibrated easing is necessary to revive private sector credit and investment.

The MPC, chaired by Governor Mostaqur Rahman, comprises Deputy Governor Md Habibur Rahman, Chief Economist Md Akhtar Hossain, Director General of the Bangladesh Institute of Development Studies AK Enamul Haque, Dhaka University Economics Department Chair Ferdousi Nahar, Executive Director Mahmud Salahuddin Naser, and until now, Sadiq Ahmed.