FE Report
Bangladesh Bank (BB) has continued liquidity support for capital market in accordance with the banks' permissible limit along with ensuring their compliance set in laws and regulations, officials said.
BB Governor Dr. Atiur Rahman Thursday said this in his speech while unveiling the Monetary Policy for January-June, 2015.
"Amid the attention to financial markets stability, the BB's attention in support of capital market stability will also continue in the second half of FY2015," Atiur said.
He said the central bank has the statutory responsibility of enforcing compliance of banks with the legal limits on their capital market exposures.
"Further to this, the BB has continued liquidity support for capital market transactions in volumes permissible within the central bank's monetary programs," the governor said.
While mentioning the government's initiative in lessening burden of investors affected during the 2010-11 stock market debacle, Dr. Atiur said the central bank played instrumental role in structuring the refinancing program supporting capital market activities.
"BB will continue its supportive role in capital market developments to the feasible within laws and regulations," the governor said.
At the press the newsmen raised question about the facility provided to large loan defaulters amid sufferings of thousands of affected investors of the capital market.
In this regard, the governor said the central bank has already disbursed Tk 6.0 billion of the capital market re-financing scheme.
"We are also sitting with the stakeholders of the capital market once in every three months," the governor said.
The ministry of finance (MoF) earlier stressed on proper coordination among the regulators of the capital market and other ones ahead of taking any decision that could affect the stock market.
In this regard, BB Governor Dr. Atiur said the central bank is engaging regularly with capital market and other financial system regulators in quarterly policy coordination meetings.
"In the first half of FY2015, the central bank has introduced a number of new investor friendly regulatory reforms facilitating external transactions of foreign and local businesses including investors in the capital market."
The governor also said due to reform brought in rules, foreign equity investments made in unlisted local companies can now be sold to local investors at market based prices rather than at net asset value.
"I hope the monetary policy declared Thursday will play a key role observed earlier for the sustainability of the money and capital market," the governor added.
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