Picking up money supply in the economy paints a positive picture that normalcy is being restored.
As per latest official statistics broad money rose 9.55 per cent year-on-year to Tk22.50 trillion by December 2025, and the pace of increase has sharply accelerated compared to last year.
In just six months, from July to December of FY26, money supply expanded by over Tk750 billion, more than three times the rise seen in the same period a year earlier. This is not a minor shift. It is a strong signal that liquidity is returning to the system, and it is happening fast.
Do not ignore what this means. When the government borrows from banks, it effectively injects new money into the economy. That money does not sit idle. It moves. It pays salaries, funds projects and circulates through businesses.
Mustafizur Rahman
Fellow, Centre for Policy Dialogue
This growth is coming from both sides of the equation. External balances have stopped deteriorating as quickly, allowing net foreign assets to recover slightly, while domestic forces are pushing even harder.
The banking system is creating more money. The government is borrowing more from banks. Businesses are taking more loans again. Prices are rising, and that alone is forcing people and firms to hold and use more cash. All these forces are working together and pushing the money supply upward.
Mustafizur Rahman, fellow, Centre for Policy Dialogue said, do not ignore what this means. When the government borrows from banks, it effectively injects new money into the economy.
That money does not sit idle. It moves. It pays salaries, funds projects and circulates through businesses. At the same time, when banks lend more to the private sector, they create deposits, which directly expand money supply. This is how liquidity builds up, step by step, inside the economy, he said.
A senior Bangladesh Bank official said the central bank has tried to slow things down with tighter policy. But the impact has been limited. The system is not responding fully. Structural weaknesses, past interest rate controls and fiscal pressure are keeping liquidity growth alive. The result is clear. Money supply is rising even when policy tries to restrain it.
He said now look at the benefits. More money in the system can support growth. It makes credit easier to access. Businesses can expand operations. Firms can manage higher costs. Economic activity can gain momentum. In a slowing economy, this kind of liquidity can act as a lifeline. It can prevent stagnation and keep investment moving.
But do not mistake this for a free gain. There is a cost, and it is already visible. Inflation remains high, and rising money supply will push it further if not controlled. More money chasing the same goods means higher prices. Households feel this immediately. Their purchasing power drops. Essentials become harder to afford. This is not theoretical. It is already happening, the central banker said.
