Dhaka, April 5 -- A resurgence in funnelling reserve money into the market through cheap state credits to banks and dollar buy from them through regulatory intervention is stoking fears of higher inflationary regime ahead.

Under a persistently tight monetary-policy regime espoused by the central bank to contain growing inflation, the inflow of the inflation-fuelling reserve money dropped to a negative growth of 0.12 per cent even in June last. Since then, in a rebound, it has risen significantly in recent months, which money- market analysts believe largely contribute to the upward trajectory of inflation over the last several months.

Apart from the regular liquidity-feeding instruments of the Bangladesh Bank (BB), they say, the flow of...