BB initiative to stabilize stock mkt will continue
Bangladesh Bank (BB) will continue to collaborate with Bangladesh Securities and Exchange Commission (BSEC) in stabilizing the capital market, said Governor Dr Atiur Rahman on Monday.
“While not directly under the purview of BB, various monetary and financial sector related actions have contributed to stabilizing the capital market, and BB will continue to collaborate with BSEC in this regard,” he said while announcing monetary policy for the second half of the current fiscal year (H2FY14).
He said the BB would continue to encourage larger borrowers to access the capital market as banks will need to comply with the recently revised regulation on single borrower exposure limits for business groups.
“BB will continue to encourage larger borrowers to access the capital market given single borrower exposure limits for banks,” he said.
While primarily an SEC issue, the BB will be supportive of the capital market through ongoing deeper regulatory coordination and policy support, Atiur said. Moreover, in order to fill the gaps in the financial landscape, the BB will facilitate the role of private equity/venture capital sources of finance, he added.
Effective transmission of monetary policy requires strengthening credit and debt markets and this will remain a key focus for H2FY14, the governor said, adding that in order to spur secondary market activity the BB has recently embarked on secondary trading in Treasury bonds and will continue to do so in H2FY14.
He said devolvement of these securities has also fallen from 34 per cent in FY13 to 26 per cent in H1FY14 and this trend is expected to continue in H2FY14.
A new Islamic bond of three months’ tenure is expected in H2FY14 which will contribute to better liquidity management of Islamic banks, the governor added.