Raise policy rate to 10% to curb inflation: Ahsan H Mansur

The policy rates should be increased further from the current 8.5 percent to at least 10 percent without further delay to curb high inflation, Ahsan H Mansur, executive director of Policy Research Institute of Bangladesh (PRI), said today.

The government should focus on keeping the monetary policy stance tight to ensure price stability, he said.

The economist made the comments at a post-budget discussion organised by the Metropolitan Chamber of Commerce and Industry, Dhaka and the PRI, held at Gulshan in the capital.

While presenting the keynote paper, Mansur said 2024-25 fiscal year is the year of macroeconomic consolidation and it will not be a year for high investment and growth.

Exchange rate stability through tighter monetary stance will be key to achieving the inflation objective, he said, adding that the interest rate structure must be allowed to move freely with market forces.

Bangladesh Bank as part of its tight monetary stance should refrain from monetising government borrowing.

The banking watchdog should also refrain from providing liquidity support to the troubled banks without bringing reforms and ensuring accountability, as per the keynote paper.