Inflation to ease within next 2 to 3 months, hopes BB Governor. Bangladesh Bank (BB) Governor Abdur Rouf Talukder today hoped that the general point-to-point inflation in the country is likely to ease within the next two to three months. “I hope that the inflation will ease within the next two to three months,” he said.
Inflation to ease within next 2 to 3 months, hopes BB Governor
The central bank Governor said this while responding to queries of reporters
at the opening ceremony of the two-day Annual Banking Conference, organised
by the Bangladesh Institute of Bank Management (BIBM), in the capital’s
Mirpur area.
The reasons for the current situation are international in nature and it is
difficult to make adjustments without unintended consequences, he said.
“The current inflation is due to imports. We’ve to import oil and fertilizer.
The price of oil has gone up. We are trying to buy fertiliser through
alternate means. The steps that the government and Bangladesh Bank have taken
will lead to a better situation,” he added.
The central bank Governor responded that the government and Bangladesh Bank’s
efforts to increase domestic supply and rein in inflation would bear better
results in the coming months.
Amid surging consumer prices, many economists have recently suggested
removing the nine percent cap on the lending interest rate.
“If the limit on the interest rate is removed, it will increase costs for
entrepreneurs. It will also increase the costs of managing funds for banks.
We want to give entrepreneurs loans at lower rates so that the production
costs stay low,” added Talukder.
The governor stressed the importance of proper bank management at the event.
Banks are not just about making profits, but must also ensure that they are
run properly, or else they risk harming the entire sector, he said.
The Governor also opined that the directors should not interfere with the
operations of banks to ensure proper management.
If they intervene in matters outside their purview, it will only harm the
institutions, he added.
Talukder mentioned that the duties of bank directors and managers have been
clearly defined and they should work accordingly.
“Directors cannot do the work of managers. And, according to the rules set by
the central bank, managers will continue their duties,” he continued.
The BB governor said he had explained this to bank directors and executives
in talks with their respective organisations.
Bangladesh Bank has recently asked six banks, both domestic and
International, to explain why they made “excessive profits” from the
overheating foreign currency market. The central bank governor said the
matter is under investigation and more information would be provided once the
probe was complete.
Prof Shah Md Ahsan Habib of BIBM said due to global and domestic factors,
inflation has put strain on the foreign exchange reserves. “If the government
and Bangladesh Bank do not take the proper initiatives to resolve this
current inflationary situation, the different targets set out in the budget
will prove unreachable.”
The BIBM organises the annual conference and several domestic and
international banks usually take part in it. In addition to sharing their
experiences, they also discuss the global state of the banking sector.
The event could not be held in 2020 and 2021. So, it is the first conference
in three years. Bankers from India, Malaysia and Nepal have joined the two-
day event.
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