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Kazemi Memorial Lecture

'Realistic monetary policy should be at play'

| Updated: June 30, 2022 20:55:08


- Dr Atiur Rahman - Dr Atiur Rahman

The central bank should continue its traditional monetary policy as a market imperative with more innovation and invest in the real economy to supply more goods and services to arrest inflation.

Former Bangladesh Bank governor Dr Atiur Rahman said this at the first-ever 'MAM Kazemi Memorial Lecture on Monetary Policy' hosted by Bangladesh Institute of Bank Management (BIBM) on Sunday night.

He says the tightening of monetary policy throughout the world with several consequences, including a shift of foreign investment from developing countries, may not be avoidable.

"Let's not be adventurous, let's touch the ground and remain focused on what has been working better for our economy," Dr Rahman advises the central bankers.

Collaboration and partnership between stakeholders should remain a key strategy, he cites. "This has worked well in the past; this will work better as well in the future."

Dr Rahman, also the chairperson at private think-tank Unnayan Shamannay, delivers his lecture virtually on Zoom platform.

He says there is still inflationary pressure, as deteriorated by the Russia-Ukraine war, in many developing countries, including Bangladesh.

Given these challenges, the former Bangabandhu Chair professor says, "We need to talk about a more realistic monetary policy that addresses more than the single target of inflation."

Inflation cannot remain oblivious as it hurts the poor.

The economist accentuates the need for a more innovative monetary policy without creating any financial imbalance.

Bangladesh needs to enable spending on nationally produced goods and services, says Dr Rahman. "This can have a positive impact on containing inflation through the route of supply side."

Bangladesh Bank governor Fazle Kabir, also chairman of BIBM Governing Board, chairs the session while BIBM director general Dr Md Akhtaruzzaman delivers an address of welcome.

BIBM Associate Prof Dr Ashraf Al Mamun, also director (research, development and consultancy) gave a vote of thanks.

Recalling Mr Kazemi's contribution, Mr Kabir says when Bangladesh did not have any monetary policy after independence, Kazemi as the deputy director of BB onerously drafted a new monetary policy for the nation.

His policy focused on sustainable GDP growth, stable inflation and exchange rate, and external balance.

During the Covid-19 crisis, Mr Kazemi played an instrumental role by advising the central bank on the policy measures to combat the impacts of novel coronavirus on the national economy

"We're grateful for all his policy initiatives to revive the Covid-affected Bangladesh economy," the governor says.

Dr Akhtaruzzaman says Mr Kazemi was one of the core architects to formulate and implement monetary policy to achieve the economic goals of Bangladesh.

When Bangladesh was facing the challenge of global economy-linked liberalisation, he made major contributions to shaping foreign exchange, money market policies and financial inclusion.

Dr Mamun says, "Contribution of late Kazemi sir to central banking as well as the entire banking sector of Bangladesh will always be remembered with great honour and dignity.

The country's prominent central banker Muhammad Allah Malik (MAM) Kazemi died on 26 June 2020 at 72.

He was born in Cumilla on 31 May 1949.

Mr Kazemi joined the BB as Officer Class-1 securing the first position in order of merit. In his 44-year career, he served in multiple major roles as executive director, deputy governor, adviser to the governor, and change management adviser.

He was meritorious, honest, ethical and patriot with a great sense of humour. He had a good command over international geopolitics, history, philosophy, science and literature as well.

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