Bangladesh Bank Governor Dr Ahsan H Mansur on Monday said despite the difficulties the financial sector is moving toward a more sustainable footing with visible progress.
The central bank has already undertaken extensive reforms to restore stability in the banking sector, curb inflation, and stabilise the exchange rate despite facing multifaceted challenges, he said.
The governor was speaking at a seminar on the publications Bangladesh State of the Economy 2025 and Sustainable Development Goals: Bangladesh Progress Report 2025, held at the Planning Commission in the capital.
The governor said when he assumed office, the country was battling rapidly depreciating currency, declining reserves, rising non-performing loans, liquidity stress and disrupted trade flows.“I was always convinced that without stabilising the exchange rate, we would never win the fight against inflation.”
He added that the exchange rate was around Tk 120 per dollar when he took office has since stabilised under a fully market-based system.
“Reserves that had dropped to around US$17 billion have increased by around US$10 billion in one year,” he said.
The governor made it clear that there is no scope for an immediate reduction in interest rates.
Despite inflation falling from 12.5 percent to just over 8 percent, he stressed the need to maintain a slightly positive real policy rate.
“Monetary policy will remain fully market-driven. Administrative control over interest rates is not an option,” he said.
He also pointed out that the government’s borrowing requirements have put pressure on the money market, but Bangladesh Bank has strictly avoided money printing.
The governor acknowledged that the actual non-performing loan (NPL) situation had long been understated.
“We brought transparency. The real NPL figure is more than 35 percent—uncomfortable but truthful,” he said.
He said Bangladesh Bank has already restructured the leadership of 14 banks, initiated processes for five banks into one bank and resolution of nine non-bank financial institutions, and advanced key legal reforms, including the Deposit Insurance Act, Bank Resolution Ordinance, and amendments to the Bank Company Act.
The Bangladesh Bank Order is also under review to reinforce central bank autonomy and accountability, he added.