Speakers for temporary flexible interest rate regime to tame inflation

Speakers at a seminar on Sunday underscored the need for ensuring a flexible interest rate regime temporarily to reduce inflationary pressure and stabilise forex reserves.   

They made the remarks at a seminar titled, "Bi-annual economic state and future outlook of Bangladesh", organised by the Dhaka Chamber of Commerce and Industry (DCCI) at its auditorium in Dhaka.

While presenting the keynote paper, DCCI President Rizwan Rahman highlighted that energy, inflation, food security, logistics and the financial sector are some of the major areas Bangladesh should look into. The trade deficit stood at $40.15 billion in FY22, he said.

“The government should rationalise the cost and ease of doing business. Discriminative policies between local and foreign investors should be removed. The government should introduce a national one-stop service,” he also said.

Rizwan suggested expediting bilateral and multilateral Comprehensive Economic Partnership Agreements (CEPA) with selective countries and revision of import tariff structure. Monetary and Fiscal policies should have a nexus for coordinated economic development.

“We can consider increasing interest cap somewhat to control inflation temporarily. The government is worried about inflation, but the country is going forward amid the global crisis. Meanwhile, we are helping the poor to supply essentials through TCB,” State Minister for Planning Dr Shamsul Alam said.

Mentioning that Bangladesh has a positive image in foreign loan repayment, Dr Alam said the country should take a loan from foreign sources as soon as possible to ease pressure on dollar, and support domestic business here. 

“Not only the Bangladesh economy but the whole world is going through a tough time in terms of economic stress, inflation, fuel price hike and supply chain disruptions. Bangladesh is not an exception to this global economic chain, but we are not in a position to panic at all.”

Regarding remittance, he said that last year Bangladesh sent about one million workers abroad and its positive impact on remittance inflow will be visible soon. He also said that the manufacturing sector has seen a 23 per cent growth in the last fiscal.