Bangladesh Bank chief says disconnect with government keeps inflation target beyond reach

The BB maintains 10% policy rate in six-month monetary policy

Bangladesh Bank Governor Ahsan H Mansur has said the government has still not achieved its inflation control target due to a “lack of coordination” among its offices.

He said monetary and fiscal policies need to complement each other to achieve the target of inflation.

The governor shared his observation on Monday after announcing the monetary policy for the January-June period.

The central bank has followed its previous approach and announced the monetary policy for the first six months of the year, maintaining the policy interest rate at 10 percent.

Inflation in the country has shown an upward trend over the past three months.

Economists do not foresee inflation to ease in February because of the parliamentary elections, or in March due to Ramadan.

Over the success of the new monetary policy, the governor said: “Apart from inflation, all other objectives of the monetary policy have been achieved.”

Noting that many things move “slowly” because of bureaucracy, he said: “There has to be coordination between market policy and fiscal policy.

“Because of a lack of coordination with the government, the goal of controlling inflation is not being achieved as expected.”