Sadiq Ahmed leaves BB’s monetary policy committee

Bangladesh Bank postponed yesterday’s scheduled meeting of the Monetary Policy Committee (MPC) at a time when Sadiq Ahmed, an economist and member of the committee, said he was leaving the body.

The central bank’s committee is responsible for formulating, implementing and reviewing monetary policy to achieve price stability -- low and stable inflation -- and support economic growth.

Officials of the central bank, seeking anonymity, told The Daily Star that there was a plan to cut the policy rate at the meeting from 10 percent to 9.50 percent.

However, the meeting was suspended following massive criticism from different quarters, they added.

After being appointed governor of the central bank, Md Mostaqur Rahman, a businessman, signalled a potential interest rate cut to revive sluggish economic growth and support the private sector.

Amid the situation, Sadiq Ahmed, vice-chairman of the Policy Research Institute of Bangladesh (PRI), submitted his resignation letter via email yesterday, saying he was no longer interested in being a member of the committee, a high official of the central bank told The Daily Star.

Ahmed also confirmed the development to the newspaper, saying, “Yes. I resigned on February 25 to allow the new governor to have his own team. I am a true believer in democratic principles and it is only fair that the new government must have full flexibility in selecting its management team including the conduct of monetary policy.”

Meanwhile, BB officials said there might be a link between the controversy over the initiative to cut interest rates amid high inflation and the resignation of Sadiq Ahmed, as well as the postponement of the meeting.

The Monetary Policy Committee consists of seven members, with the governor of the central bank serving as chairman.

Sadiq Ahmed was the external member nominated by the board of directors.

The other members are BB Deputy Governor Md Habibur Rahman, Chief Economist Md Akhtar Hossain, Director General of the Bangladesh Institute of Development Studies AK Enamul Haque, Chair of the Economics Department at the University of Dhaka Firdousi Naher, and Executive Director of Bangladesh Bank Mahmud Salahuddin Naser.

Contacted, Md Habibur Rahman told The Daily Star that the meeting had been postponed until the end of the holidays for the upcoming Eid-ul-Fitr.