Prof Abu Ahmed slams BB tight monetary policy, fears depression

Eminent economist Professor Abu Ahmed has warned the country's economy might witness depression due to the tight monetary policy of the central bank to fight inflation, reports UNB.
"This is not a good policy for our economy," he said while talking to UNB over telephone.
He mentioned that Bangladesh Bank has increased the interest rate heavily aiming to control the inflation which was in the double digit recently.
"Investment has already been lowered along with lowering consumption, as a result the revenue collection has been dropped," he said.
Abu Ahmed, who serves as director and chairman of the Investment Corporation of Bangladesh, clearly said that in the current scenario the revenue collection will not increase to the desired level.
"Economic gowth rate is downward, so far no investment, there is no employment generation," he said. He criticised central bank's policy to contain inflation through increasing repo rate and interest rate.
"This step might work for the advanced economy, but this will not work in economies like Bangladesh," he said. The senior economist of the country said that this step of the central bank is causing irreparable loss to the country.
"This is also discredit for the government, which resulted in less revenue collection, reduced budget size. This is not a good policy for our country," he added.
He suggested that the chief adviser sit with the finance adviser and Bangladesh Bank governor to fix the matter.
He also pointed out that due to this step the capital market of the country is suffering a lot.
"The root cause is this step of the central bank. This resulted in higher interest rate of the bond market that pushed money to flow there," he said.