The dominance of extortionists at the markets and administrative failure are the key reasons behind mounting inflation, according to the Business Initiative Leading Development (BUILD), a local think tank.
High policy rate, increase in interest rate and exchange rate, lack of monitoring at the primary stages of the supply chain, unclear role of competition commission, and increased public expenditure are the other reasons.
Asif Haider, a research associate at BUILD, presented a study on inflation at BUILD’s office on Monday during the 12thFinancial Sector Development Working Committee (FSDWC) meeting, chaired by Bangladesh Bank Deputy Governor Nurun Nahar, according to a release.
During the meeting, the discussants criticised the late policy response of BB for the longstanding inflation is a concern.
Nurun Nahar was optimistic about bringing the inflation down to 7-8% within June 2025. She also expected to introduce a market-based interest rate by this year.
Competition Commission Member Wajid Hasan Shah said the commission was reviewing the existing law as it is a quasi-judiciary organisation to broaden its scope of work.
In response to a BUILD CEO Ferdaus Ara’s proposal for lowering interest rate for Export Facilitation Prefinancing Fund(EFPF), the deputy governor said it is not possible as Tk5,000 crore of Tk10,000 crore has already been disbursed. She also mentioned BB’s tight monetary policy for this.
However, Nurun Nahar agreed to examine the possibility of extending the EFPF for the partial exporters as NBR is working on it.
She further stated that BB has announced a policy to provide up to Tk10 lakh loan facilities to an individual Non-Resident Bangladeshi(NRB) to be repaid through the banking channel on domestic currency.
Khan Mohammad Saifjada, additional director of BB, stated that the central bank does not have any target of broad money they just make a projection of it.
He pointed out that due to negative balance of payments, the net foreign asset growth slowed down but now the current account is stabilised to some extent that has eased the pressure on BoP.
