Now BB opens crisis resolution consultation

Bangladesh Bank opens consultation with economists, think-tanks, business bodies and professional groups on how to manage inexorable inflation and persisting macroeconomic stress-two cardinal concerns of the day.
As part of the crisis-resolution initiative, BB governor Abdur Rouf Talukder Thursday sat for a meeting with eminent economist and former adviser of a caretaker government Professor Dr Wahiduddin Mahmud, sources at the central bank said.
The central bank makes the move on conducting stakeholder consultation in the wake of growing pressure on Bangladesh's macroeconomic front, like mounting inflationary pressure and foreign-exchange crunch.
Confirming the meeting, BB spokesperson Md Mezbaul Haque said, "The central bank often holds such consultation meeting with stakeholders which, in fact, helps take more effective policy initiatives."
In the first meeting, he said, the BB governor sat with Professor Dr Wahiuddin Mahmud to seek his valuable opinions regarding the policy issues.
During the parley, Mr. Mahmud suggested stopping the injecting of 'high-powered money' into government accounts by the central bank although the 'devolvement mechanism', as such, credits, contributes to rise in the inflationary pressure largely, the BB spokesperson quoted the economist as saying.
In response, the central bank governor explained the context of the policy regarding the supply of high-powered money, which is synonymous with print money. But the governor agreed with Dr Mahmud and told him that the BB already started move of curtailing the use of the new circulated money into the money market to contain inflation.
"And it (print money reduction) will be continuing," the governor was quoted as saying about fist-tightening.
The meeting sources said the eminent economist laid emphasis on a "transparent, credible and predictable policy because policy uncertainty and speculations lead to various problems like hoarding, exchange-rate distortions and market monopoly".
He suggested that the BB policymakers hold consultations with the stakeholders on a regular basis instead of shyness, according to the meeting sources.
Meeting-insiders said the economist recommended giving top priority to taming inflation at the moment instead of long-term financing.
Furthermore, he termed growing NPLs a serious burden on the banking sector and asked the BB authority to take effective measures to recover the money so that access to credits by small entrepreneurs can be ensured.

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