JOURNAL OF THE INSTITUTE OF BANKERS BANGLADESH Volume 64 Number I & II January-June, 2017 ~ July-December, 2021

Published Online: February 8th, 2022 || Published in Print: February 9th, 2022

Abstract

A major challenge for Bangladesh's economy would be to control inflation, keep import payments manageable, stop the loss of foreign reserves, and preserve stability on the foreign exchange market. It will be extremely difficult for the government to control inflation, which is predicted to increase in the days to come due to causes including pandemic fallout, war supply chain interruptions, and domestic adversities. In the meantime, the government released a growth-centric expansionary national budget with high fund deficit. In the coming days, this will increase inflationary pressure once more. With the main objective of cooling inflation and containing foreign reserve erosion, the Bangladesh Bank tightens monetary policy stance without removing the lending and deposit rate cap. On the other hand, Bangladesh's total external loans increased steadily to a total of $93.23 billion, having an unfavorable impact on its foreign exchange reserves. In a nutshell, Bangladesh's macroeconomic situation appears to be somewhat precarious.