Inflation to ease within next 2-3 months, hopes BB governor
Bangladesh Bank (BB) governor Abdur Rouf Talukder on Saturday hoped that the general point to point inflation in the country is likely ease within the next two to three months, reports news agency BSS.
“I hope that the inflation will ease within the next two to three months,” he said.
The central bank governor said this while responding to queries of newspersons 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 fertiliser. 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
“The current inflation is due to imports. We’ve to import oil and fertiliser. 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 per cent 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.
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
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 said 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 further 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.
Professor 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.