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