Bangladesh has begun printing money again, says PRI

The govt has begun to print money and borrowing from banks although inflation remains above 8 percent, says PRI Principal Economist Ashikur Rahman

The government has begun borrowing from banks by printing money even though inflation remains above 8 percent, says Ashikur Rahman, chief economist at the Policy Research Institute of Bangladesh (PRI), a private research institute.

"The government has started printing new money. In March alone, the government took a loan of Tk 200 billion from Bangladesh Bank. This is high-power money, printed money. That is, inflation may increase due to its impact," he said at a press briefing organised by the Australian government's Department of Foreign Affairs and Trade (DFAT) and PRI at the PRI office in Banani on Thursday.

In his keynote address at the seminar titled “Evolving Global Landscape for Trade and Growth,” he said: “Global economic instability—especially the geopolitical situation in the Middle East, international policy uncertainties, and the challenges of LDC graduation—is putting pressure on Bangladesh’s economic stability. In this context, it would be suicidal for us to backtrack on reforms. I hope the government will review the bank resolution.”

International Chamber of Commerce, Bangladesh (ICCB) President Mahbubur Rahman said, “Risks in the financial sector are increasing due to lack of structural reforms and global uncertainty. Therefore, reforms are needed not because of IMF pressure but for the country’s economy.”

Commenting on the long-standing instability in gas and electricity supply in the country, he said: “Trump’s tariffs, war and energy problems, so many things have come together. Under the circumstances, if we have to move forward, then we have to choose our own way.

Mahbubur said, "Entrepreneurs are hesitant to expand business and investment in the country. They are wondering whether they will get gas and electricity. The government and businessmen have to work together. The weakness of the banking sector, the complexity of obtaining loans, and the risk of defaulted loans are further challenging the investment environment."

He called on the government to take strict action against loan defaulters.

PRI Chairman Dr Zaidi Sattar, claiming that no “reform” has taken place in the last 15-20 years, said: "When a democratic government took power in 1990-91, they were able to make drastic, major reforms, and the opportunity to change the course of the economy has come after so many years."

Khandaker Sakhawat Ali, a research fellow at BRAC University, said: "Despite the growth in deposits in the banking sector, there is a lack of good governance. It is important to prevent money laundering and ensure transparency in the financial sector."

Commenting that subsidies provided by printing additional money for budget implementation will increase inflation, Ashikur said that the impact of printing money will directly affect the common people.