IMF says the Central Bank should tackle higher than target monetary aggregates that are subsidizing big corporations at the expense of poor savers. IMF says the Central Bank should tackle higher than target monetary aggregates that are subsidizing big corporations at the expense of poor savers. IMF’s outgoing Resident Representative Jeremy Carter said Central Bank should tighten policy interest rates as monetary aggregates were above its target of 15 percent.
Monetary growth was running at 19 percent according to the last published figures of the Central Bank.
The bank’s holdings of Treasury Bills were also above Rs. 70 billion.
“The CB has a target for monetary growth that it thinks is appropriate and that is approximately 15 percent. It will appear when the board papers are published. The board papers will be published immediately after the board meeting.”
“To achieve that lower pace the Central Bank should have a policy and it has to work on that. It has to look at the interest rates. If it thinks the appropriate pace is 15 percent it has to take steps to do it,” Carter says.
The Central Bank says the monetary expansion was