Impact of Monetary Policy of Bangladesh Bank on the

Performance of Stock Market in Bangladesh

Hypothesis: Stock Market is an important element in our financial
system and Bangladesh Banks monetary policy make indirect impact
on this market. So Monetary policy performance should be the big
issue for Stock Market. The paper shows the impact of monetary policy
performance on Dhaka Stock Exchange. The researcher used selected
indicators for measuring money supply a key tool for implementing
Monetary Policy and selected indicators for measuring the performance
of Dhaka Stock Exchange Limited.
Data/ frequency: Annual data used range (2006-2010) from Dhaka
Stock Exchange. Usually data used money supply (money stock,
reserve
requirement,
etc.)
and
stock
performance
(index,
capitalization, turnover, etc.) for measuring money supply and
measuring Stock Performance in our economy.
Methodology:
The empirical findings of this study show statistically significant
correlation amongst the indicators for measuring money supply and
the indicators for measuring performance of Dhaka Stock Exchange
Limited, in addition to the statistically significant influence of Monetary
Policy on the performance indicators of DSE. Also used t-test
Hypothesis to make compare among different time period.
Findings:
The findings of this study support the assumptions that monetary
policy undertaken by Bangladesh Bank can influence the performance
of the Dhaka Stock Exchange Limited. Therefore, the coordinated role
of Bangladesh Bank and the Security Exchange Commission has gained
increasing importance in maintaining a stable Capital Market.
Key Words: Broad Money, Reserve Money, Monetary Policy, Dhaka
Stock Exchange Limited, Bangladesh Bank.
Md. Nahidul Islam
Email: nahidulislam2000@gmail.com
Mobile: 01520102861