Policymakers' corner: Challenges of monetary policy in a developing country

For a central bank to be successful in regulating the financial sector, it must have relevant and pragmatic policies. It should ensure that all financial institutions, including banks, comply with prudential and management norms. Both internal and external factors are making it difficult for Bangladesh Bank to monitor and regulate the financial sector, especially banks. Bangladesh Bank has to move away from its present conventional stance towards a heterogeneous, unconventional and implementable approach. It must strike a balance showing an appropriate professional stance while avoiding the negativity of politically motivated reforms in a highly technical domain.