The New Nation - Internet Edition

Staff Reporter

International Monetary Fund (IMF) yesterday expressed concern over the soaring inflation in Bangladesh and prescribed some measures to tame it.

Bangladesh Bank Governor Dr Salehuddin Ahmed, however, refused to bow to the lender's 'pressure' saying, the central bank itself will formulate its monetary policy considering the overall situation of the country.

A visiting five-member IMF delegation, led by its Adviser for Asia and Pacific Thomas Rumbaugh, had a meeting with the Governor and other high officials at the latter's office in Dhaka.

The IMF team exchanged views on the country's monetary situation, when the central bank is all set to announce its half-yearly monetary policy for July-December period within a week.

After the meeting Dr Salehuddin told journalists that Bangladesh would formulate a monetary policy on its own- without paying heed to any IMF prescription.

He said the IMF delegation voiced concern over inflation in Bangladesh and prescribed some suggestions to rein in inflation.

"We told them that we would make a policy on our own to face the challenge of inflation. We hope it would yield good results," the Governor said.

He said the monetary policy for July-December would be designed to control inflation, generate employment, boost growth and cut poverty.

Whatever they say, we won't sacrifice our target of continued macroeconomic stability, poverty alleviation and job creation," the Governor told journalists.

He said the new monetary policy would provide incentives to sectors having better performances and a few emerging sectors like shipbuilding. The policy would re-examine the incentives for sectors having slow growth and poor employment, he added.

Dr Salehuddin said the meeting also discussed the price situation in the country. Bangladesh looks at it as its number one challenge and will take steps to face the situation.

The current monetary policy gave priority to investments in the agriculture and employment-generation sectors, he added.

"I've told them (IMF delegation) that the inflationary pressure will be mitigated to some extent if we can increase the purchasing power of the poor people," he said adding, "Inflation is a major global challenge."

Replying to a question, Dr Salehuddin said the country received highest-ever remittance of US$ 7.9 billion in the last fiscal year and they were considering the possibility of investing the remitted money through discussions with the bankers.

Asked whether the IMF team suggested them to pursue contractionary monetary policy, the Governor said, "They did not suggest anything on monetary policy. It will not come to effect even, if they suggested."