Excess Liquidity will Not Affect Inflation: BB Governor
Monday, 24 August 2009

Bangladesh Bank governor Atiur Rahman has said the current surplus liquidity would not affect inflation as the central bank is ready to shift its course any time, if needed.

Bangladesh's foreign reserves increased by a staggering 31 percent during FY2008-09 on the back of remittance, Atiur told a roundtable on monetary policy in the city on Sunday.

He said reserves have risen by some $2.6 billion just since Jan 2009 and are expected to touch $10-11 billion, the highest in the country's history, in the next few months.

The prime minister's adviser for economic affairs, Mashiur Rahman, addressing the seminar as chief guest, said remittance should be viewed as opportunity to save and invest.

"Proper surveys should be conducted on how relatives of the remitters spend the money. Generally they utilise it to buy land and to better their standard of living. They should also be encouraged to save and invest."

He said investment should also come from corporate savings and profits.

Mashiur also called for reduced interest rates to assist small and medium entrepreneurs, who are now, "facing gambles in the market".

The central bank and the government would work together to keep the money market stable and ensure steady growth, he added.

Agriculture sector needs more priority

Agricultural development had been neglected for years, Atiur said.

He mentioned recent initiatives of providing funds for share-cropping and assistance for renewable energy.

Mashiur pressed more credit in agriculture and said, "Government's policy will not work if credit is inadequate."

Moreover, he said, the assessment of available resources should be obtained to facilitate the sector. "We should gather the data through research."

Bangladesh Institute of Development Studies organised the roundtable on 'Promoting Growth with Stability: Challenges Facing Monetary Policy Stance' at the Sheraton Hotel.

Source: bdnews24.com

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