Bangladesh Bank governor expects inflation to fall below 7% by September

Bangladesh Bank Governor Ahsan H Mansur has expressed confidence that inflation will ease to below 7 percent by September, aided by exchange rate stability and waning price pressures.

He highlighted that recent exchange rate stability has eased one of the biggest inflation risks, allowing prices to moderate and paving the way for potential interest rate cuts.

Mansur said: “The main inflation challenge was exchange rate volatility. Without stabilising it, prices would have risen further.

“The exchange rate is now steady, even after being left to market forces, which has restored confidence and set inflation on a downward path.”

The governor was speaking at a post-budget press conference at Dhaka’s Osmani Memorial Auditorium on Tuesday.

Food inflation, which was over 14.5 percent, has eased to just above 8.5 percent.

According to him, non-food inflation, which usually trails food prices, has fallen from 12.5 percent to about 9.25 percent and continues to decline.

Mansur noted that global prices for food, oil, and gas are expected to remain stable or decrease in some areas, contributing positively to domestic price trends.

Data from the Bangladesh Bureau of Statistics (BBS) released on Monday showed overall inflation in May dropped to 9.05 percent, the lowest in 27 months.

The last time inflation was below this level was in February 2023 at 8.87 percent, before climbing above 9 percent consistently.