BB governor favors inflation up to certain level to encourage growth; Subsidized credit at 2% interest for farmers to cultivate pulse, oilseeds,spices

By AKM Moinuddin

Dhaka, Oct 3 (UNB) – Bangladesh Bank (BB) Governor Dr Atiur Rahman on Sunday favored inflation to a certain level for encouraging growth but expressed concern over food inflation.
“To encourage growth, we’ll have to tolerate inflation a bit…growth may be hampered if we go hard in containing inflation but we’re still worried over food inflation,” he said addressing the luncheon meeting of France-Bangladesh Chamber of Commerce and Industry (CCIFB) held at Hotel Sheraton in the city.
Dr Atiur made a multi-media presentation on ‘Role of Monetary Policy in Enhancing Inclusive Growth’ at the meeting chaired by CCIFB president Shah Sayed Kamal.
CCIFB Vice President Humayun Rashid and director Rifat Rashid, among others, also addressed the meeting.
Considering Monetary Policy as an important tool of growth, Dr Atiur said Bangladesh set a target of 8 percent growth by 2015 and 10 percent by 2021. He thinks the growth is achievable but sees energy and infrastructure as major challenges to reach the objectives.
“Since liberation war, Bangladesh has remarkably raised its per capita income four-fold and if such trend continues, Bangladesh will undoubtedly enter into the club of middle-income country soon,” he said.
The BB governor said Bangladesh is a well-capped secret which has lot of success stories to tell. “By nature, we always focus our failures much keeping the success stories untold.”
Sharing the government’s plan to improve the financial condition of farmers and bring prices of some essential commodities at tolerable level, he said: “We’re offering subsidized credit at 2 percent interest for the farmers to cultivate pulses, oilseeds and spices.”
Talking about the rising trend of Foreign Direct Investment (FDI), Dr Atiur said the FDI is largely redirected to Bangladesh from different countries in recent days despite global meltdown.
“The FDI are being diverted to Bangladesh from different countries…it’s a good sign and now we need to ensure energy and infrastructure to make the flow of FDI sustainable,” he said.
In his presentation, the BB governor showed how the export turned into positive growth coming out from the deep negative in the last fiscal.
On the issue of the development of banking sector, he said Bangladesh will soon have a ‘national switch’ to popularize e-commerce to get benefit of modern banking system.
He also said the central bank would turn into a fully automated body dumping paper-based documentation process. “We’ll soon turn into paper-less documentation body…everything will be done electronically…we’ve started following this partially.”
Justifying the Bangladesh Bank decision over buying gold recently from the International Monetary Fund (IMF), Dr Atiur said: “We’re indeed lucky…gold price goes up and the government made profit worth over US$ 25 million in few days.”
END/UNB/AKM/