#Title

Inflation
FROM PAGE B1
The meeting was also attended by the central bank governor, secretaries of the finance, commerce, and food ministries as well as senior officials of other relevant ministries.
After the meeting, the new central bank governor said it would be possible to work on the domestic market from three angles, one of which is the supply side.
“This relates to how we can increase supply by increasing production and create a positive impact on the market,” he added.
Second, issues like extortion that have come to the fore need to be addressed. The third will be addressing demand-side issues.
Bangladesh Bank is already working to this end and there will be a review to know whether more can be done, Mansur said.
He said another important challenge is the dearth of foreign currency, as a result of which Bangladesh is currently unable to import as per previous levels, impacting the overall market.
Mansur said keeping inflation at a tolerable level will be possible within five to six months if issues like foreign currency reserves, extortion and lower production are addressed adequately.
“We are hoping for that but we need time to work,” he added.
He also said it is not possible to solve the foreign currency crunch overnight.
Apart from that, Mansur said the reserves cannot be reduced illogically and that a minimum level has to be maintained. This is because an illogical decline would lower investor confidence in the market.
So, the central bank needs to maintain the minimum reserve level in sectors where US dollars are used for imports, he said, adding that calculated steps should be taken in this regard. He also informed that they would discuss the issue with development partners.

Dollar pinned near one-week low
REUTERS, Tokyo
The dollar hovered near a one-week low on Wednesday as traders bet US consumer price data later in the day will keep the Federal Reserve on course to cut rates next month, while sterling eased after softer-than-expected inflation numbers.
New Zealand’s dollar dropped more than 1 percent after the Reserve Bank of New Zealand reduced the key cash rate and flagged more cuts to come in a sharp dovish shift.
Traders were largely cautious ahead of US inflation data at 1230 GMT (8:30 a.m. ET), which is expected to show consumer prices increased 0.2 percent in July, on a month-on-month basis, following a 0.1 percent decline a month ago.
The dollar index - which measures the greenback against other major currencies - dipped 0.1 percent to 102.52, after slumping 0.5 percent on Tuesday when a slower-than-expected rise in producer prices reinforced hopes of a US rate cut next month.
The dollar’s weakness helped the euro hit a seven-month high of $1.1010, surpassing the high hit during the market turmoil on Aug. 5.
“Traders are positioning for a weaker CPI number, which of course (poses) a risk that if the CPI comes in line or little bit with an upside surprise, the dollar is going to go strong again,” said Volkmar Baur, FX analyst at Commerzbank.
“If it surprises on the downside, it shouldn’t be swaying the Fed in the direction of a 50-basis point cut because inflation is a lagging indicator and a somewhat weaker CPI wouldn’t be a signal of an impending recession.”
Traders had been widely expecting a rate cut in September before the producer price data, and ramped up bets for a super-sized 50 basis-point cut after the release to 52.5 percent from 50 percent a day earlier, according to CME’s FedWatch Tool.