Now, the BB is going to announce another expansionary monetary policy, which might be unveiled tomorrow.
But a question remains how the central bank will mitigate the downside risks deriving from the excess liquidity if it rolls out another expansionary policy.
The unconventional policy has not worked as expected since the government has been compelled to impose strict restrictions on movement from time to time to contain the coronavirus pandemic.
Despite the availability of funds, the private sector is still adopting a go-slow policy to expand their businesses as the pandemic shows no signs of abating. If the central bank continues to follow the existing monetary measures, it will create more excess liquidity in the banking system.
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