The Bangladesh Bank experienced a 2.0% negative growth in reserve money, declining to Tk 3.7 trillion in December 2023, as part of inflation-control measures. The central bank halted the “devolvement” operation in August 2023, ceasing the printing of money to combat inflation. Despite increased interest rates to restrict money supply, inflation remains high, nearing a two-digit level. Business borrowing and investment have slowed due to rising rates. Bangladesh Bank’s net foreign assets declined, impacting reserve money. With a decreased money supply, interest rates rise, reducing business and consumer spending, and leading to a decrease in inflation. Government borrowing is also lower than expected in the fiscal year 2023-24.
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