Speakers at a post-budget discussion stressed the need for a tightened monetary policy and liberalisation of the exchange rate to combat inflation and address foreign exchange reserves.

The discussion was organized by the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) at its Gulshan office on Wednesday.

Dr Ahsan H. Mansur, Executive Director of the Policy Research Institute (PRI), in a presentation, highlighted the macroeconomic context characterised by elevated inflation, reduced imports due to a shortage of dollars, and sluggish export growth.

He advocated for a tight monetary policy stance to control inflation, achieve price stability, and maintain exchange rate stability while allowing the market to determine interest rates.

Ahsan also emphasised the need to reduce government expenditure, particularly on administrative costs and subsidies, thereby limiting government borrowing from the banking system.

He warned that the economy cannot be sacrificed to protect weak banks. He stated, "Policy must be maintained; we cannot move away. Funding is being provided to commercial banks which are in a liquidity crunch due to their own causes."

He suggested that Bangladesh Bank should stop providing liquidity support to weak banks, which is contributing to rising inflation.

In another keynote presentation, Adeeb H. Khan, FCA, Member of the Tariff and Taxation Committee, MCCI, discussed selected income tax and VAT provisions from the Finance Bill 2024-2025.

He urged the introduction of two separate authorities for tax and VAT and emphasized the need for bank mergers to follow proper processes and include experts in the merger committee.

Dr Mashiur Rahman, Economic Adviser to the Prime Minister, Dr Zaidi Sattar, Chairman of PRI, and Kamran T Rahman, MCCI President, among others, also spoke at the event.