Repo rate needs an increase to tame inflation: State minister

State Minister for Planning Shamsul Alam on Sunday said the repo rate – the interest rate at which the central bank lends money to commercial banks – needs to be increased to tame inflation.

"Otherwise, price hikes will continue and our exports will be hampered. Illegal hundi trades will also increase, as a result," he said while talking to reporters at his office in the capital, after UN Resident Coordinator Gwyn Lewis paid a courtesy call on him.

The Bangladesh Bank offers a repo rate of 5.5% currently.

The state minister, however, said inflation in the country might decrease a bit in November, if the global inflation does not go up further.

"Our Aman paddy and vegetable production is expected to be good this time, which will contribute to a fall in price hikes."

He cited less production of rice in the last Aush and Boro seasons, global volatile markets, and India's increased duties on rice export as the reasons behind the increased inflation in recent times.

"However, we are now prepared to face international challenges. For example, we have handled the Corona situation well. We did not know about the Russia-Ukraine war in advance. Still, we can tackle this crisis by implementing the goals of the 8th Five-Year Plan," added Shamsul Alam.

Earlier in the courtesy meeting, Gwyn Lewis emphasised an effective coordination between different ministries, meeting sources said.  He also suggested automation to speed up the processing of development projects.