crore to support banks in executing two stimulus packages of Tk50,000 crore, announced by the government for large and small industries. The central bank also formed a Tk5,000 crore pre-shipment refinance scheme to help export-oriented industries. Furthermore, the Export Development Fund was extended by $1.5 billion (Tk12,750 crore) to facilitate the export sector. A new fund of €200 million (Tk 1,838 crore) was also introduced for green projects. The central bank introduced a Tk3,000 crore subsidised loan fund for supporting
Bangladesh Bank has created additional money worth Tk70,794 crore through various refinance schemes and easing regulatory requirements after the Covid-19 outbreak in March for stimulating demand to revive the declining economy. Usually, banks disburse loans of Tk70,000-Tk80,000 crore every year following credit demand, but lending capacity is assumed to be less this year due to borrowers not returning money amid a shutdown of business activities. So the central bank expects that about Tk30,000 crore will come from banks this year. As a result, total Tk one lakh crore is ready to flow in the market, said a senior executive of the Bangladesh Bank. Bangladesh Bank has formed a refinancing fund of Tk25,000 crore to support banks in executing two stimulus packages of Tk50,000 crore, announced by the government for large and small industries. The central bank also formed a Tk5,000 crore pre-shipment refinance scheme to help export-oriented industries. Furthermore, the Export Development Fund was extended by $1.5 billion (Tk12,750 crore) to facilitate the export sector. A new fund of €200 million (Tk 1,838 crore) was also introduced for green projects. The central bank introduced a Tk3,000 crore subsidised loan fund for supporting small and medium enterprises (SMEs) affected by the Covid-19 pandemic. It curtailed the cash reserve ratio (CRR) to 4 percent from 5.5 percent, releasing fresh Tk20,000 crore from the central bank reserve. The Bangladesh Bank will also give interest subsidy to agriculture loans of Tk1,206 crore. Recently, Prime Minister Sheikh Hasina announced an incentive package of Tk72,750 crore to offset the possible downturn due to the outbreak of the novel coronavirus.
a) What type of
b) According to Keynesians, how can the transmission mechanism get blocked? Given the current Covid-19 situation, do you think these two issues occurring are likely? Explain your answer linking the two issues to the current situation.
c) Given the current situation, who are winning the debate, activists or not activists? Explain your answer.
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