He also advocated introduction of income generating schemes and direct communication between local producers and consumers through cooperative society to eliminate the role of middlemen to curb inflation.

Bangladesh Bank (BB) Governor Dr Salehuddin Ahmed was briefing journalists on the present inflation situation at his office in Dhaka.

Anticipating a 7 percent GDP growth by the next fiscal, he said Bangladesh would become a middle income country at the end of the next decade.

If the role of middlemen is reduced, the income of the growers and the supply of essential goods would mark rise, Dr Salehuddin said, adding that many developing countries have taken such measures and get benefits to keep inflation at a tolerable level.

Md. Allah Malik Kazemi, Md. Nazrul Huda and Ziaul Hassan Siddiqui, BB's three deputy governors, were present at the press conference.

The central bank governor suggested that government can sign deal with the trade bodies and businessmen of essential commodities to keep inflation at permissive level.

He however said implementation of such a deal should be monitored, as most of the decisions reached at parleys between the two sides have not yet come into effect.

The governor said the average inflation rate at the onset of the current fiscal was 7.54 percent on point to point basis and 7.16 percent on average basis.

The rate came down to 6.72 percent on point to point basis and 5.94 on average basis in January due to oil price reduction in the international market and BB's tight monetary policy.

However, the inflation increased to 6.94percent on average basis and 7.43 percent on point to point basis in March this fiscal due to surge in oil price and other commodities in the international market, he said.

Many people expressed their deep concern over the 21 percent hike in petroleum price in recent time.

In such context, inflation rate on point-to-point basis can increase slightly, but average inflation rate may stand around 7percent in the current financial year.

The BB governor said, "High import cost basically results in inflation in Bangladesh, which is not much higher than that in other neighboring countries."

Laying emphasis on encouraging small importers along with big importers of essential commodities, the BB chief said that the central bank has already taken some measures in this regard.

The BB directed all commercial banks to facilitate the small importers, he told the journalists, adding that it also monitors the big traders who import over 50 thousand tonnes of essentials.

It is the perfect time to increase the production of lentil, edible oil, spices and other agro-products locally, which can help reduce inflation, the BB governor opined.

He said coordination between the policies of revenue, trade and monetary is urgent to contain the inflation.

Citing an example, he said the National Board of Revenue (NBR) has to impose tariff on food items with a target of increased revenue.

On the other hand, the Ministry of Commerce always tries to avoid tax on food items.

Hence, an integrated policy is needed where revenue increases and price of food items does not soar, he said.

He stressed the need for increase in revenue collections, but it should be done in a coordinated way.