2 weeks Ago
The persisting higher policy rates may negatively impact the country's investment and job creation in the long run, according to the Dhaka Chamber of Commerce and Industry (DCCI). "The government is gradually raising interest rates to curb inflation. This strategy may succeed in the short term, it should not be sustained over the long term," said Ashraf Ahmed, president of the DCCI.
He also mentioned that the private sector will benefit if the interest rate is reduced after December. He made these remarks today while delivering a keynote speech at a seminar titled "Current State and Future Outlook of Bangladesh Economy: Private Sector Perspective" held at the DCCI office in Dhaka's Motijheel. Ahmed explained that higher interest rates slow private sector growth, investment, and employment generation.
"When interest rates rise, the flow of loans decreases," he said. However, Salim Al Mamun, director for research of Bangladesh Bank's Chief Economist Unit, urged the business community to be patient amid the current economic situation. "Inflation is not under control yet, so until it declines, the policy interest rate will continue to rise, as stated in the central bank's monetary policy," Mamun said.
He emphasised that stabilising inflation and the macroeconomic environment is currently more important than focusing on economic growth. Mamun expressed hope that if the government's measures are properly implemented, inflation could return to a manageable level within eight to ten months..
