All instruments positive, inflation likely to fall ahead of schedule: BB Governor

Bangladesh Bank (BB) Governor Dr Ahsan H Mansur on Tuesday said inflation is expected to come down to a reasonable level earlier than the target set in the FY2025- 26 budget, thanks to a stabilised exchange rate.

"A fluctuating exchange rate is one of the challenges for increasing inflation. On the other hand, bumper food production brings a blessing to decreased food inflation from 14 per cent to around 8 per cent now. The non-food inflation has declined to below 9 per cent from over 12 per cent," the governor said while speaking at a post-budget press conference in the capital's Osmani Memorial Auditorium.

He said the budget aims to keep average inflation at 6.5 per cent and expressed his belief that inflation would decrease even further.

The governor highlighted the exchange rate as one of the major challenges in curbing inflation, adding that the situation has already improved significantly.

Dr Mansur also pointed out that prices of oil and gas in the international market are not expected to rise further, while Bangladesh's export capacity has significantly improved. Besides, the central bank has maintained a tight monetary policy to bring down the inflation rate.

These combined efforts will help bring inflation below the target set in the budget, he said, adding, the interest rate will be decreased after the inflation rate reaches a reasonable level.