Further contraction of monetary, fiscal policies needed to control inflation: Atiur Rahman tells BB

The central bank needs to take steps towards further contracting the monetary and fiscal policies in order to control inflation, former central bank governor and emeritus professor Atiur Rahman told the Bangladesh Bank today.

At a policy review meeting with the central bank on Wednesday (4 October), he opined that macroeconomic stability is more important right now than growth.

Former senior finance secretary Mohammad Tareque was also present at the meeting and expressed the same opinion.

Meanwhile, Atiur Rahman also stressed on providing more credit to the agriculture and SME sectors and called for speedy implementation of credit guarantee schemes, especially for small entrepreneurs.

Highlighting the reluctance of big entrepreneurs to repay loans, he recommended more money flow towards small entrepreneurs to ensure more financial inclusion.

Even if the foreign exchange reserves are slightly reduced, the Bangladesh Bank should carefully provide dollar support for the import of consumer goods and fuel in order to maintain the overall financial stability, Atiur said.

At the same time, he advocated more emphasis on economic reforms in the future so that the economy can be freed from the pressure of defaulted loans.

Earlier, in a meeting with the Bangladesh Bank on 28 September, eminent economist and executive director of the Policy Research Institute, Ahsan H Mansur, said the central bank should emphasise on increasing forex reserves and reform the banking sector as well as halt giving loans to the government for now to control the rising inflation.