Question

Discuss the major objectives, targets and instruments of monetary policy in Bangladesh. What are the major features of m...


Discuss the major objectives, targets and instruments of monetary policy in Bangladesh. What are the major features of monetary policy of fiscal year 2020-21?

Answer

Monetary policy: It refers to the policy that helps in controlling the money supply of the economy. The economy will try to reduce the supply of money to curb the inflation rate. The monetary policy is used to increase and decrease the supply of money in the economy. The monetary policy is of two types contractionary and expansionary policy that help the government under different situations.  

The major objective of Bangladesh government is to achieve the stability of price in the economy, the other aim of the Bangladesh government is to make the currency regulates and more reserves can be made in the society. The government is also trying to make the economy more sustainable and try to create more production in the economy with the more increase in the employment, with more economic growth. The major features of monetary policy used in 2020-21 is that the government has to use the expansionary policy due to which economic production can be increased by the economy. The other feature is that to target the CPI inflation of the economy and to increase the expenditure in the economy.    

Hence, the monetary policy will help the government to increase the expenditure in the economy.

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