There is possibly no denying that in view of a very weak opposition along with a not-so-active parliament, some above-average and reasonably honest civil bureaucrats have taken command of the country's policy regime. This has also been further attributed by most of our economists and civil society members not having adequate visibility regarding how the country or economy is being run.

Though I am not aware of how many of them studied economics at the university, it is apparent that this powerful group of public servants has successfully built a cohesive team among themselves.   

Recently, I had frank conversations with a few members of the group on the interest rate and the exchange rate. While on the exchange rate, most of them felt that the taka rate should have been allowed to go for a gradual depreciation against the US dollar, but most of them seemed to be very stubborn about not shifting from the 6 per cent deposit rate and the 9 per cent lending rate.

On the other hand, my banking and economist friends in North America and even in India thought that the interest rate hike is almost a one-way traffic to dampen money circulation and, thereby, command rising inflation.

The inflexible policy on interest rates also does not conform to basic and conventional monetary economics and has already drawn criticism from macro-economists

We have heard US President Biden attributing a lot of credit to the success of monetary policy through interest rate hikes to rein in the rising inflation. Even in Bangladesh, preliminary investigations revealed that the low-interest rate is the culprit behind people buying cash dollars as a tool for savings rather than keeping money at the banks at sub-inflation rate deposits. Some economists felt that unless we leave the interest rate to follow a market route, roaring inflation cannot be controlled.

However, the bureaucrats, as well as regulators, seemed to be very focused on driving money to the hungry stream of the economy as the non-governmental organisations and micro-credit institutions borrow from the banks and non-bank financial institutions and then go on to lend to small and micro-entrepreneurs.

Of course, my friends from the economics department felt that the existing fixed interest rate regime is going to be very counter-productive and that in the long run, this is only going to keep more common people under dire stress.

The inflexible policy on interest rates also does not conform to basic and conventional monetary economics and has already drawn criticism from macro-economists. Furthermore, it is also risky, especially given that compared to Turkey, our banking sector is quite fragile and is lacking in depth and strength. If inflation is not controlled soon and it continues to spike, it can send more people to the streets whereby begging may be an option.

I do agree with my bureaucrat friends that the dollar crisis may have eased a bit and acceptably may stabilise around Tk 100. However, I, along with my friends and some economics teachers at home and abroad, feel that the possibility of an economic crisis remains. At this point in time, it may not come from abroad but rather from the unconventional and perilous policies being championed by our policymakers.

The author is an economic analyst.