No crisis in economy, says BB governor
Bangladesh Bank Governor Atiur Rahman said yesterday there is nothing to be worried about the overall economic condition of the country.
“There's no crisis in the economy and nothing to worry about. The economy is now in a stronger position,” Rahman told the news agency over phone.
On the government's bank borrowing, the central bank governor said there is no reason to worry about it either.
The chief of Bangladesh Bank (BB) came up with these observations in the wake of concern voiced by different quarters over the current state of the national economy.
According to BB officials, the government borrowed Tk 8,130.58 crore in the first quarter of the current fiscal year, which is higher than the same period last fiscal year.
A BB senior official said it is less than half of the targeted loan of the current fiscal year (Tk 19,000 crore).
The official, preferring not to be named, said it is untrue that increased government borrowing from the banking sector is contributing to inflation. “A major part of public sector expenditure, being used as subsidy, helps ease inflation.”
Meanwhile, a BB report said there is no evidence of a low flow of credit to the private sector for the government borrowing from the banks.
The government has kept Tk 23,600 crore in deposits from the public sector's credit balance of Tk 79,267 crore, which is being used by the banks in providing loans to the private and public sectors.
The report also said the pressure of paying import bills mounts pressures on the exchange rate but it will not exceed tolerable levels.
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