Monday, 24 June, 2024, Reg No- 06
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BB has failed to control inflation

Central Bank blamed for delayed decision to raise interest rate

Published : Sunday, 19 May, 2024 at 12:00 AM  Count : 229

Though the country had record food production  the average price inflation in April eased slightly compared to March, but food inflation again crossed double digit to 10.22 per cent.

According to the latest monthly consumer price index of Bangladesh Bureau of Statistics (BBS)  average inflation eased slightly to 9.74 per cent in April from 9.81 per cent in March.

However, it was not possible for the  government to keep  inflation within 6 per cent. Even it was not possible to bring inflation down to 7.50 per cent as announced by Bangladesh Bank.

The central bank failed to take the right steps at the right time, causing sufferings to common people requiring them to buy food at higher prices.

As inflation rose across the world after the Russia-Ukraine war, almost all the central banks tried to control it by raising interest rates.

Most of the countries were successful in this bid.

However, despite high inflation, interest rate on loans remains capped at 9 per cent in Bangladesh, though the countrys economists and experts called for controlling inflation by raising interest rate.

Bangladesh Bank did not take the advice into consideration.

While almost all countries succeeded in controlling high inflation, Bangladesh Bank still restricts imports to save foreign exchange reserves.

As a result, high inflation continued for a long time.

The central bank later started to take steps to raise interest rates from July 2023, considered by experts as too late.

The delayed initiative is not working.

In January, BB announced its monetary policy for the second half of the current fiscal.

BB Governor Abdur Rauf Talukder said that the monetary policy for the second half of the fiscal  had been prepared to keep inflation within 6 per cent.

He hoped that using the new monetary policy it would be possible to reduce the inflation rate to 7.5 per cent by June and to 6 percent by the end of the fiscal.

Earlier, the central bank had set the target of bringing inflation down to 6 per cent by June.

Economist Dr Qazi Khalikuzzaman said, there is a saying, a stitch in time can save nine.

He said that steps not taken in due time cannot work.

He said that the money is in the hands of defaulters, so action is needed to recover defaulted loans.

Recently, Sri Lankas central bank set an  example by controlling high inflation, by monitoring every product in retail as well as  wholesale markets.

Daily commodity prices were posted on the website of the Central Bank of Sri Lanka, which continues.

According to BBS, average food price inflation was 10.22 per cent in April, up from 9.87 percent a month ago.
Average non-food inflation eased slightly to 9.34 per cent in April from 9.64 per cent in March.

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