Inflation targets not being achieved

Even increasing interest rate

Farhad Chowdhury: Interest rates are continuously increasing in the country’s banking sector. But it has no effect on inflation. Inflation remained close to 10 percent, exceeding the target of 6 percent.
Bangladesh Bank has adopted contractionary monetary policy to control high inflation. At the same time interest rates have risen steadily. But inflation is increasing instead of decreasing.
Meanwhile, Bangladesh Bank Governor Abdur Rauf Talukder has repeatedly promised to reduce inflation to a bearable level, but implementation is elusive. Experts say monetary policy is being implemented due to lack of coordination and not taking the right decisions at the right time.
It is known that Bangladesh Bank has set a target level of inflation of 6 percent in monetary policy. However, in no month has it fallen below 9 percent, which is touching 10 percent.
According to Bangladesh Bureau of Statistics (BBS) data, inflation was 9.81 percent last March. It was 9.67 percent in February and 9.86 percent in January, 9.41 percent in December and 9.49 percent in November. Similarly, inflation was 9.33 percent in March 2023. Whereas in the financial years 2021-22 and 2022-23, inflation was 6.15 percent and 8.84 percent respectively.
It is reported that the interest rate cap was forced to remain at 9 percent on April 1, 2020. Which has been given a smart rating from July of the current financial year. In July, the interest rate was 10.10 percent. It gradually increased to 13.55 percent last March. Interest rate in financial institutions is 15.55 percent.
Abdur Rauf Talukder joined Bangladesh Bank as Governor on 12 July 2022. Then he said, ‘Inflation will come down soon.’ On August 22 of the same year, after the opening ceremony of the ‘Ninth Annual Banking Conference’, he said, ‘Inflation will be at a bearable level in the next two to three months as a result of the global inflation control initiative. will come. Apart from this, he said in the last 17 January monetary policy program that inflation will come close to the target only after fasting. However, no real reflection of these is visible.