Yunus: Previous governments printed 60 billion taka notes to fuel inflation

The people are suffering from high inflation due to the Sheikh Hasina government’s injection of Tk6 trillion into the market, Professor Muhammad Yunus, principal adviser to the caretaker government, said yesterday.

“One of the caretaker government’s main goals is to contain unprecedented inflation,” he said in a televised address to the nation.

The chief adviser’s comments reflect the fact that inflation eased in August but remains above 10 percent, with rising prices of goods and services continuing to erode consumer purchasing power.

Bangladesh’s inflation rate has remained above 9% since March 2023.

The Consumer Price Index (CPI), which measures the change over time in prices paid by consumers, stood at 10.49 percent last month, according to data released by the Bangladesh Bureau of Statistics (BBS).

Yunus, who was sworn in after a massive uprising on August 5 toppled the Awami League government, said previous “fascist” governments had printed more currency and put it into circulation with the intent of “plundering”.

He added that the Bangladesh Bank has already raised the policy interest rate to 9 percent to combat inflation.

“Efforts are on to distribute essential items at fair prices through open market sales and food-friendly programmes to protect the common people from inflation,” he said.

The government has allocated Tk 580 billion for import of rice and wheat, while it has allocated Tk 890 billion for domestic procurement of grains.

The government has also allocated Tk 736 billion for providing food subsidies to the poor and low-income groups through three programs this fiscal year.

He said the central bank had introduced a market-based exchange rate to reduce fluctuations in the exchange rate.

Yunus further said the government has rolled back unethical provisions that legalised black money. The previous government had offered a unique amnesty under which anyone could wipe out their illicit gains without any investigation by paying a 15% tax on their assets including cash, securities, deposits, financial schemes and instruments.

However, the caretaker government did not revoke the amnesty that made black money white by requiring investments in real estate (apartments, buildings and land) to pay a certain amount of tax depending on the size and location of the property.

Yunus added that the government was also seeking budgetary support from various development partners to increase foreign exchange reserves.

The country has requested an additional $3 billion in aid from the International Monetary Fund (IMF), $1 billion from the World Bank, and $1 billion from the Japan International Cooperation Agency (JICA).

“Discussions are underway with Russia regarding the settlement of advance payments and outstanding amounts for the construction of the Ruppur nuclear power plant,” he said.

Yunus also said the government was leading efforts to rationally cut operational and development expenses to curb pressure on the national exchequer.

He added that the extravagant projects were undertaken under the “authoritarian” Hasina government.

“We have already begun the process of reviewing all ongoing and proposed development projects. Depending on their stage of implementation, we will consider reducing expenditure and, if necessary, cancel them.”

Yunus, who won the Nobel Peace Prize in 2006, said the interim government planned to end plundering in the name of megaprojects and increase budget allocations for health and education.

He said the government had asked both Russia and China to lower loan interest rates and extend maturity periods.

In addition, the government instructed relevant agencies to publish performance data on economic indicators.

“We have taken steps to recover the looted and laundered funds,” he said, adding that the government would set up a banking commission to restore discipline in the financial sector.

“Boards of various banks have been restructured. Within a month, major changes have taken place in the banking industry. I’m sure you’ve noticed it.”