In Bangladesh, food inflation surged to 12.66% in October, up from 10.40% in September, which drove overall inflation to 10.87%, according to data released by the Bangladesh Bureau of Statistics (BBS) on Thursday. Considering the very high level of food inflation, the interim government of Bangladesh and its central bank announced new measures including relaxing import and lending rules for commodity importers on Thursday.
As part of these measures, the Bangladesh Bank will temporarily remove the letter of credit (LC) margin on essential imports such as edible oil, sugar, and chickpeas until Ramadan, aiming to stabilise prices. Additionally, the central bank plans to exempt commodity importers from the 25% single-borrower exposure limit to enhance their import capacity, Bangladesh Bank Governor Dr Ahsan H Mansur told reporters Following a meeting with Finance and Commerce Adviser Salehuddin Ahmed.
The economists were of the view that inflation in Bangladesh is not solely demand-driven; structural issues like inefficient market systems and supply constraints also play critical roles. The economist suggested reducing tariffs to boost imports and improving the supply chain to mitigate food inflation is the need of the hour.
By Navalsang Parmar (Dhaka)