People seeking prudent inflation tackling mechanism: experts

Experts have underscored the need for applying prudent inflation-tackling mechanisms to ease the life of the countrymen. Due to the impact of the ongoing Russia-Ukraine war, the global price of food products including fuel oil has increased and the supply has been interrupted.

The inflation rate has also increased. Inflation of food products has increased the most. Sri Lanka, a South Asian country bankrupted by the economic crisis, has already managed to reverse its high inflation rate. Many countries have seen inflation trend downward.

But some countries including Bangladesh have not yet been able to bring down the high inflation rate. On the other hand, the rate of food inflation is the highest in Bangladesh.

According to the Bangladesh Bureau of Statistics (BBS), the inflation rate rose to 9.94 percent in August. Among them, food price inflation is 12.54 percent. Inflation of non-food products is 7.95 percent. That is, the price of food products increased more than non-food products. At the same time, where food is produced, i.e. in villages, food inflation is higher, which is 12.71 percent. This rate in the city is 12.11 percent.

The former governor of the central bank Salehuddin Ahmed said, according to the rules of the economy, where products are produced, prices are low. Where it is delivered, the cost of the product is higher due to various factors including transportation costs, and handling.

Farmers are not getting fair prices and the major part of the profit is being looted by the middlemen or the so-called syndicates. If this syndicate is not broken, it is not possible to reduce inflation in the country.

South Asian countries Sri Lanka, Nepal along with neighboring India have been able to control inflation. The US has it pretty well under control. European countries including the UK have also been able to control this rate. But this rate is increasing in Bangladesh.

Policy Research Institute (PRI) executive director Ahsan H. Mansoor said that although the central bank increased the policy interest rate, it did not have any effect on the market.

Interest rates are artificially maintained. It does not reduce the flow of money. Holding down the value of the dollar has created a barrier to increasing supply. It is a devaluation of money. 

Food inflation has dropped in economically bankrupt Sri Lanka. In September last year, this rate rose to 85 percent. Now it has decreased. Instead of price inflation, there is a reverse reflection or value addition. Last July, value addition was 4.8 percent. Food prices in the country have risen by less than 2 percent during the period under review.

RAPID chairman Mohammad Abdur Razzaque suggested introducing a market-based interest rate and exchange rate system to manage inflation.