World Bank Country Director for Bangladesh and Bhutan Abdoulaye Seck on Thursday said inflation in Bangladesh is likely to remain elevated in the near term and gradually subside, as import prices stabilise over the medium term.
“Pressure on the external sector is expected to persist in FY24, depending on global conditions and domestic exchange rate, monetary, and fiscal policies. We have already seen this forecast materialising in data from the past two months, which show weak performance in export earnings and remittance inflows,” he said.
“To help contain inflation, the transmission of monetary policy can be strengthened, including phasing out the use of interest rate caps on lending,” the World Bank country director said at a luncheon meeting of the American Chamber of Commerce in Bangladesh (AmCham) at the Sheraton Dhaka in the capital.
At the same time, Abdoulaye Seck said, financial sector vulnerabilities need to be addressed through effective bank supervision. “Recent monetary policy updates are a step in the right direction, but a faster pace of implementation is needed.”
