Journal Name: Journal of Business Studies
ISSN: ISSN 2410-8170| Title: | The Operational Aspects of Monetary Policy in Controlling the Demand and Supply of Money |
| Author(s): | Masud Rana, Md. Kamal Hossain, and Rebeka Sultana Rekha |
| Keywords: | Monetary Policy, Demand of Money, Supply of Money, Bangladesh. |
| Doi: | https://doi.org/10.58753/jbspust.4.1.2023.26 |
| Download: | https://pust.ac.bd/uploads/pust-journals/pdf/1726545785.pdf |
Abstract
Purpose: The primary aim of this research is to examine how monetary policy operationally manages the demand and supply of money within Bangladesh’s economy. Methodology: This analysis is based on structured interviews conducted with 207 respondents from Bangladesh Bank and 19 listed private conventional commercial banks. The data were interpreted using percentages, descriptive statistics, and varimax rotated factor analysis. Findings: Based on adjusted mean scores, the research identified and ranked 14 factors influencing Bangladesh's control of money supply and demand. The most impactful tools identified were interest rate-related instruments, reserve instruments, open market operations, and credit control tools, as determined by varimax rotated factor analysis. The rankings accurately represent the current state of the money market in Bangladesh. Practical Implications: The study fills a gap in the literature and tests existing theories on monetary policy in Bangladesh. The findings are valuable for regulators, commercial banks, academics, and policymakers, providing insights that could enhance the effectiveness and goal orientation of central bank policies. Research Limitations: The small sample size of 207 respondents limits the study's scope. Additionally, restricted access to previous studies and data limitations posed challenges. The research focused solely on Bangladesh Bank and listed private commercial banks, excluding non-bank financial institutions (NBFIs) and the capital market.
