Bangladesh Bank Governor Dr Atiur Rahman has said the central bank will not allow a further rise of the inflation rate as there are signs of good crop production this year.

“Inflation is the biggest enemy of the poor. But, in no way, we would allow to grow further,” he said adding that Bangladesh is in a better position in terms of poverty scenario in comparison with that of the neighbouring countries as it witnessed participatory economic growth.

“The economic change in Bangladesh is not only quantitative but also qualitative,” the governor said while addressing a roundtable on financing agro-based small and medium industries held at the FBCCI auditorium on Tuesday.

“Inflation might have reached somewhat high, but at the end of the day the country is enjoying a GDP growth rate of around 7 percent,” Atiur told businessmen requesting them for showing tolerance to some ‘growth pains’ for a stable economy.

While citing the high growth rate of some neighbouring countries Atiur said, “slow and steady growth is sustainable and we want to go in that direction.”

On poverty alleviation among rural poor, Atiur said, “Only the agro-based industry can create an effective safety net through employment generation, which must cut income fluctuation among the rural poor.”

The governor, however, said the central bank wants both the agricultural and industrial developments as the manufacturing sector is a major source of employment generation. “We want to walk on both feet,” he added.

FBCCI president AK Azad in his speech demanded re-imposition of 13 percent cap on lending. “Fourteen percent lending rate on working capital for the industries is also too high, whereas the previous cap of 13 percent was a burden for them,” the president of the apex trade body said.

He also slammed the banks for their over exposure to the capital market. “The industrial sector can’t suffer for such profit making tendencies of the banks,” he added.

Other discussants of the roundtable, however, demanded caps both on lending and deposits for ensuring a stable banking sector.

Sukamal Singha Chowdhury, general manager, BB’s SME and Special Programmes Department, presented a keynote at the roundtable organised by BRAC Bank.

In his paper, he stressed on agro-based industrial development and diversification of products. The farmers’ access to the agriculture loans has increased remarkably in recent time and banks are also showing interests in disbursing agri loans, he mentioned.

Managing director of Brac Bank Syed Mahbubur Rahman, FBCCI director Golam Mostafa Talukder, Former FBCCI presidents Abdul Awal Minto, Akram Hossain and Abul Kashem, among others, took part in the discussions.

News: Daily Sun/ Bangladesh/ 13-Apr-2011