Economic Adviser Sees Stability in Banking Sector

Economic adviser Dr Salehuddin Ahmed has emphasised that reducing interest rates is far from a simple task. According to Dr Ahmed, setting interest rates is a highly complex process, closely linked with other financial instruments such as treasury bills and savings certificates. A change in any one element of the financial system can have wide-ranging effects, making sudden adjustments to interest rates potentially risky.

Recent developments, however, have seen the yield on treasury bills decline from 12 per cent to 10 per cent. Analysts suggest that this reduction has contributed to renewed stability within the banking sector, sending positive signals to both investors and depositors.

Dr Ahmed made these observations while delivering the keynote address at the launch of the seventh edition of the data-driven publication Banking Almanac, held on Saturday at the CIRDAP Auditorium in Dhaka. The event was chaired by Dr Hossain Zillur Rahman, former adviser to the caretaker government and acting chairman of the Banking Almanac Board of Editors.

The ceremony also featured remarks from prominent figures including Abdul Hai Sarker, chairman of the Bangladesh Association of Banks and Dhaka Bank; Finance Secretary Khairuzzaman Mozumder; Secretary of the Financial Institutions Division Nazma Mobarak; Deputy Governor of Bangladesh Bank Nurun Nahar; former banker Mohammad Nurul Amin; and Mahbubur Rahman, CEO of HSBC Bangladesh. The executive editor of the almanac, Syed Ziauddin Ahmed, and project director Abdur Rahman delivered the welcome address.

Dr Ahmed likened interest rate adjustments to pressing a balloon: “Pressure applied on one side can cause expansion elsewhere. While treasury bill yields have decreased, inflation has seen a slight rise. This demonstrates that controlling interest rates alone cannot ensure economic stability; supply chains and market regulation must also be carefully managed.”

Dr Hossain Zillur Rahman outlined five key indicators for assessing the health of the economy:

Stability of the banking sector and reserve levels

Confidence and security among entrepreneurs, from small farmers to large business owners

Effectiveness of policies and financial support

Everyday economic comfort, including inflation levels

Good governance and the reliability of information

Abdul Hai Sarker noted that political control over certain banks had historically contributed to pressure on interest rates, but expressed confidence that government intervention could stabilise the sector. Finance Secretary Khairuzzaman Mozumder added that issues with Letters of Credit, which previously required daily intervention at Bangladesh Bank, have now been resolved without any bank failures.

2026 Interest Rates and Inflation Overview

Published with support from Bangladesh Bank, Banking Almanac remains a vital resource for analysing trends and assessing the current health and stability of the country’s financial sector. It provides policymakers, investors, and banking institutions with essential insights for informed, data-driven decision-making.