Mansur hopeful of bringing down inflation at acceptable level
DHAKA, August 14, 2024 (BSS) – Newly-appointed Governor of Bangladesh Bank
(BB), the central bank and apex regulatory body for the country’s monetary
and financial system, Dr Ahsan H. Mansur today expressed his optimism that
the general point to point inflation would come down at an acceptable level
gradually in the country within the next five to six months.
“If extortions can be resisted in the market, if we can boost production
through agricultural inputs, then inflation will come down at an acceptable
level gradually within the next five to six months. This is my expectation,
but we’ll have to work and give more time… We’ll have to work in many
areas, let’s see and we’ll deliver our best,” he said.
The BB Governor was talking to reporters after attending a meeting to review
the inflation and food supply situation in the country chaired by Adviser to
the interim government on the Ministries of Finance and Planning Dr
Salehuddin Ahmed at the Ministry of Finance Conference Room at Bangladesh
Secretariat here today.
Mansur said there is no denying the fact that there is shortage of foreign
exchange in the country for which the businesses could not import as much as
they can. “It’s putting an impact on the market. These things will ease up
gradually acknowledging the practical scenario. Our forex constraints will
also ease up,” he added.
Turning to the foreign currency situation, Dr Mansur, also a former executive
director of Policy Research Institute (PRI), said the crisis in foreign
currency reserves would not go away overnight and it would be considered how
much foreign currency could be supplied to the market.
“We’ll have to walk and thus move forward through maintaining transactional
flow in a balanced way. Hopefully, these can be done. We’ll also talk with
the development partners on how to increase the flow of reserves. On the
whole, we’ll get the desired results after some months,” he continued.
He said the foreign currency reserve should have to be contained at a minimum
level and it cannot be reduced at an irrational level, otherwise there will
be lack of confidence in the market.
Asked whether there was any discussion on the formation of the banking
commission, he said although there was no discussion today, the issue would
surely be discussed as banking sector reforms should have to be done. “The
government will take the necessary decision and we, from the Bangladesh Bank,
will also sit with the government and talk with the concerned stakeholders.
We’ll have to frame a strategy and roadmap and Insha Allah, you’ll know once
it takes place,” he added.
About the previous government’s decision of bank merger, Dr Mansur termed
that decision as a ‘premature’ and ‘half-hearted’ effort. “Everything can
come in the context of overall banking sector reforms like merger,
liquidation, recapitalization, ownership change and these are the options.
But, what can be applied to which bank in which context can be determined,”
he said.
About the discussions in the meeting, the Bangladesh Bank Governor said
inflation can be addressed through three angles like the supply side where
supply can be raised through increasing production which would put a positive
impact on the market.
Secondly, cash pull elements like tariff policy and distortions should have
to be contained while thirdly, inflation can also be controlled through
controlling the demand side.
