1. Does Purchasing Power Parity Hold after Floatation of Bangladesh Currency?
- Ziaul Hasan Siddiqui
- Jamshed uz Zaman

Abstract
Using monthly data on CPI of Bangladesh and weighted average CPI of the country's trade partners and nominal exchange rate for the period 2001 to 2007, this paper explores the existence of both short term and long term absolute PPP. The results of mean reversion hypothesis indicate that PPP does not hold in short run in Bangladesh. Co-integration analysis, the other approach, shows that absolute PPP holds for pre-floatation period and it did not hold for post floatation period i.e., June 2003 to December 2007. The reasons for the departure can be many that include rapid increase in our export trade sector, deregulation in foreign exchange market and indepth reforms in the financial sector and capital markets.

2. Volatility in the Call Money Rate and Efficacy of Monetary Policy Operations in Bangladesh
- Mahmud Salahuddin Naser
- Md. Shahiduzzaman

Abstract
This paper examines the pattern of volatility in the call money rate and its association with monetary policy operations of Bangladesh Bank (BB). In the process, it explores empirical issues like the co-movement of money market rates and the presence of heteroscedasticity in the call money rate. The first stage analysis supports the view that money market rates co-move and there is a co-integration between overnight money market rate and BB's policy interest rates. At the second stage, long-run properties of the data were incorporated while trying to investigate the efficacy of operational policy of BB in the indirect policy regime by separating the short run and long run effects. As the variances of the error terms are not constant, OLS estimation provides a false sense of precision. A GARCH model is, therefore, estimated which suggests that the operational policy of BB is effective in influencing the rate volatility in Bangladesh. The empirical evidence of this study will assist in better understanding the interest rate channel of monetary transmission, overnight money market behavior, and operational policy of BB.

3. A Study of Job Satisfaction in Financial Sector in Chittagong : A Gender and Marital Status Perspective
- Mohammad Moinul Haque
-Taufique Sayeed

Abstract
This study attempts to identify the level of job satisfaction among employees working in financial sector as a whole; from gender perspective, from marital status perspective and from both perspectives simultaneously. It also tests whether level of job satisfaction differs among the employees in terms of their gender, marital status and both. Data are collected from respondents of 15 different financial institutions of various types, selected on random basis. A total of 206 responses are collected, 50% of which are male and 43.69% are married. The sample is grouped on the basis of 'male', ‘female', 'married', 'unmarried', 'married male', 'married female', 'unmarried male' and 'unmarried female'. These groups are then used to identify the mean levels of job satisfaction among different employee groups. It is found that the overall level of job satisfaction of employees is moderate. ‘Unmarried’ are more satisfied than 'married' and 'unmarried male' are more satisfied than 'married male'. No statistically significant difference is found between other groups.

4. Non-Bank Financial Institutions in Bangladesh : An Analytical Review
- Md. Nehal Ahmed
- Mainul Islam Chowdhury

Abstract
Non-Bank Financial Institutions (NBFIs) in Bangladesh are gaining increased popularity in recent times. Though the major business of most NBFIs is leasing some are also diversifying into other lines of business like term lending, housing finance, merchant banking, equity financing and venture capital financing. The purpose of this paper is to highlight different features of NBFIs, their contribution to the overall economy and the product base of NBFIs. The paper also shows the performance of NBFIs as measured by different financial indicators. Special emphasis has been given to identify the challenges faced by NBFIs in Bangladesh and, finally, development of NBFIs as well as their role in strengthening the financial system of Bangladesh has been discussed. It is found that despite several constraints, the industry as a whole is performing reasonably well.

5. Technology Based Products and Bank Performance : Bangladesh Experience
- Mohammad Mizanur Rahman

Abstract
The paper provides evidence on and implications of technology based products in banking activities in Bangladesh. It also gives a detailed account on the present status and trends in offering technology based products and services by the country's banking sector. The study uses six alternative methods of dividing the banks into two different groups relating to technology adoption, namely adopters and non-adopters. This study uses bank's ROA, and ROE as profitability indicators; non-interest income growth as revenue generating indicator; non-interest expense growth as cost indicator; and deposit growth, loans and advances growth, interest income growth, total income growth, interest expense growth, and total expense growth as other performance indicators and shows that the adopters outperform the non-adopters in terms of most of these indicators. One of the important findings of the study is that the profitability of the technology-adopters improves as they gain maturity in adopting technology based products and services. The conclusion, however, is applicable in the case of PCBs and a group of selected 40 scheduled banks forming the technology-adopter group, but the results turn out atypical when the FCBs and other scheduled banks are considered separately in forming the group.

6. An Analysis of Bangladesh's Transition to Flexible Exchange Rate Regime
-Sayera Younus
-Mainul Islam Chowdhury

Abstract
The intention of this study is to assess the experience of the exchange rate regime gained by Bangladesh so far, and also to evaluate the impact of the exchange rate regime on macroeconomic variables. Bangladesh stepped into the floating exchange rate regime at the end of May, 2003 with the objectives of increasing the effectiveness of monetary policy on one hand and to avoid crisis associated with the fixed exchange rate regime on the other. An analysis of the macroeconomic variables under different exchange rate regimes shows that like other studies output growth in Bangladesh performed well in the intermediate and floating exchange rate regimes.

7. Development of Commodity Market in Developing Economies : Potentials for Bangladesh
-S.M. Ahsan Habib
-Atul Chandra Pandit

Abstract
Instability in the commodity prices has always been a source of concern for the manufacturer, trader, banker, consumer, government and the like. In response to the price instability and inefficient marketing of commodities, there have been efforts to develop and introduce commodity markets and instruments. With the liberalization of agricultural trade and withdrawal of government support to agricultural producers there is a need for price discovery and physical trading mechanism, a need that often can be fulfilled by commodity exchanges. In this background, this paper aims to discuss activities and operations of commodity exchanges; to understand developments of commodity exchanges and hedging instruments in developing economies; to find basic requirements to set up a commodity exchange; and to identify the potentials of establishing commodity exchanges and introducing commodity hedging instruments in Bangladesh. Accordingly, this paper presents a summary of the developments that has taken place so far in the developing economies regarding commodity exchanges. Regarding establishment of a commodity exchange in the country, it recommended for consultation and cooperation among different government agencies, central bank, farmer cooperatives/associations, financial institutions, and civil society organizations. Besides, government, media, academia and civil society have to play roles in educating key stakeholders especially farmers and traders.

1. The Relationship between Foreign Direct Investment and Economic Growth in Bangladesh: An Empirical Analysis
- Sakib-Bin-Amin

Abstract
The article examines the long run relationship between Foreign Direct Investment (FDI) and economic growth for Bangladesh using the data for the period 1979-2002. The Johansen cointegration technique has been used and a valid long run positive relationship between FDI and economic growth is observed. So the results of the article show that FDI has a positive impact on economic growth of Bangladesh in the long run.

2. The Role of Institutional Lenders in Alleviating SME Financing Problem in Bangladesh
- Rashed Mohammad Saadullah

Abstract
Small and Medium Enterprises (SMEs) play an important role in the socio-economic development of Bangladesh as in many other developing countries. Ironically, however, Bangladesh provides a classic instance of SME sector receiving far too little public and private support than is justified in view of their contributions to the country's Gross Domestic Product (GDP). Of all the operational bottlenecks precluding the growth of this sector, dearth of credit especially from institutional sources poses the most formidable challenge. This paper makes an attempt to address how institutional lenders such as banks can play a more effective role in alleviating the lean flow of credit to SMEs drawing upon the experiences of developed countries. Furthermore, it also evaluates how institutional SME lenders view in the context of Bangladesh, the applicability and efficacy of various financing tools and arrangements that have been developed and practiced successfully in developed countries.

3. Job Satisfaction of Bank Employees : A Comparative Study of Public and Private Sector Banks
- Fahmida Chowdhury

Abstract
This study analyzes and compares the extent of job satisfaction among the employees of public and private sector banks and concentrates on comparison of job satisfaction in different management levels within the banks. It also tries to focus on the job satisfaction of male and female bankers of different management levels in different types of banks. The study finds that the private sector bank employees are more satisfied than public sector bank employees. There is also difference of job satisfaction in different management levels in both the sectors except in the mid-level. The study further observes a significant difference in job satisfaction among the top-level employees with the lower level employees in all cases except the female bankers of private sector banks.

4. Determinants of Bilateral International Trade : Evidence from OECD Countries and
Lessons for South Asia
- Nasir Uddin

Abstract
The study investigates determinants of bilateral trade among thirty member countries of Organization for Economic Cooperation and Development (OECD), which produce 60 per cent of the world's production of goods and services. It applies augmented Gravity Model for this purpose using panel data collected for 20 years, eleven variables, 435 cross sections and 8700 observations. The econometric analyses indicate that exchange rate volatility and distance have significant negative impact on bilateral international trade flows. Free Trade Agreement (FTA), the membership in OECD, having ports, contiguity, and common language, on the other hand, have significant positive impact on the bilateral international trade flows.

5. Causal Relationship between Selected Macro-economic Variables and Stock Market : A Case Study for Bangladesh
- Mohammad Shafiullah

Abstract
This paper investigates the causal relationship between selected macroeconomic variables and the stock market for Bangladesh. By applying the techniques of Augmented Dickey Fuller unit-root test, cointegration test and Vector Error Correction Model (VECM) proposed by Johansen (1991), this paper has tried to find out the relationship of selected macroeconomic variables, viz., industrial production, inflation, money supply and exchange rate with the share price index of DSE, using monthly data for the period January 1997 to December 2006. The result shows know causal linkage between stock prices and the four variables under consideration.