Raft of measures soon to tame inflation

The interim government has decided to double the amount of rice against one crore family cards and change the market monitoring strategy to tame inflation.
The decision came yesterday at a meeting attended by Finance and Commerce Adviser Salehuddin Ahmed; Planning and Education Adviser Wahiduddin Mahmud; Power, Energy and Mineral Resources Adviser Muhammad Fouzul Kabir Khan; and Bangladesh Bank Governor Ahsan H Mansur at the Secretariat.
Considering the global market situation and measures taken domestically, inflation will decline, Mansur told reporters after the meeting at the secretariat.
“However, this could take time. The step taken to tighten monetary policy usually takes 12 to 18 months to have an impact on controlling inflation. We have to have patience and will implement the policy with patience,” he said.
It was decided at the meeting that each family cardholder would get 10 kilograms of rice instead of 5kg, said Finance Secretary Khairuzzaman Mozumder.
Besides, the number of family card-holders and beneficiaries of open market sales (OMS) will also be increased, he said.
A decision has been taken to withdraw the margin for opening letters of credit to import six to seven essential food items, Mansur said, adding that the notification on this would be issued on Sunday.
Also, the single exposure limit for importers will be relaxed for at least two to three months ahead of Ramadan so that the supply remains smooth.
The import price and selling price of the goods in the domestic market will be monitored, he said, adding that the markets will not be monitored forcefully since it could have adverse effects.
Mansur identified three reasons behind the rise in inflation: the recent floods, workers’ wage hikes and the base effect.
Since July, the government has been releasing inflation data without control.
“Now, the Bangladesh Bureau of Statistics releases data freely. When data is released freely, there could be some changes in percentage, which is known as base-effect,” he said.
Due to this effect, inflation may remain high in the next few months, which is known as a statistical artefact, Mansur said.
“The good news is that prices of goods in the international market are declining. Besides, the government has taken several measures. So, inflation will decline for sure.”
For example, although the price of rice is high, it is not as high as it was last year, Mansur said.
This time last year, the price of rice was Tk 5 to Tk 6 more for a kilogram.
Besides, the rice price in the local market is lower than in the international market. As a result, importers are not importing rice despite the zero duty on the staple.