Inflation to shoot up with oil price hike

Finance Minister AHM Mustafa Kamal has said that inflation rate will shoot up due to rising oil prices. "Prices of all commodities increase as soon as the oil price goes up. We will continue our efforts to bring down the inflation rate," the minister said on Wednesday.

He said, "The government is thinking about taking measures for the poor. The decision will be taken after discussing with the prime minister."

Talking about dollar crisis, the minister said, "Dollar rate is now in an unstable state everywhere in the world. Those who are engaged in war and who are provoking the war are facing the same consequences."

"We are trying to keep the forex market stable," he added.

Replying to a query about the removal of treasury chiefs of six banks, Mustafa Kamal said, "There is a limit for keeping dollars at banks. If any bank reserves dollars beyond the limit, it must have done so for illegal business purposes."

On 8 August, the Bangladesh Bank ordered the removal of treasury chiefs of six banks after finding evidence against them of making higher profits in trading dollars.

According to Bangladesh Bank sources, the banks include Dutch Bangla Bank, Brac Bank, City Bank, Prime Bank, and Southeast Bank and multinational bank Standard Chartered Bank.

Domestic inflation of the country is expected to peak in the short term (3rd quarter of 2022) and abate later towards the end of 2023 with the projected easing of global commodity prices, to a finance ministry report.

The country faced a massive dollar crisis as remittance dwindled and imports increased in comparison to exports in the post-Covid period. The price of the dollar hit the record at Tk119 in the open market today (10 August).

In the interbank currency market, the US dollar was being traded at Tk95 on Monday. 

To control the manipulation of dollars in the open market, till 2 August, 80 money changers were raided and show cause notices were issued as irregularities were found in 42.

The Bangladesh Bank also announced the suspension of five money changers' licenses.