Visible Progress in Financial Sector, Says Governor

Bangladesh Bank Governor Dr Ahsan H Mansur on Monday said that despite multiple challenges, the country’s financial sector is showing visible progress. He added that the central bank has undertaken extensive reforms to restore stability in the banking sector, control inflation, and stabilise the exchange rate.

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 detailed the measures taken.

He noted that when he assumed office, the country faced rapid currency depreciation, falling foreign reserves, rising non-performing loans, liquidity stress, and disrupted trade flows. “I was convinced that without stabilising the exchange rate, we could not win the fight against inflation,” he said.

At the time he took office, the exchange rate was around Tk 120 per dollar, which has now stabilised under a fully market-based system. Foreign reserves, which had dropped to approximately US$17 billion, have increased by around US$10 billion within a year.

Dr Mansur clarified that there is no scope for immediate interest rate reduction. Even though inflation has fallen from 12.5 percent to just above 8 percent, maintaining a slightly positive real policy rate is necessary. “Monetary policy will remain fully market-driven. Administrative control over interest rates is not an option,” he said.

He also noted that government borrowing has exerted pressure on the money market, but Bangladesh Bank has strictly avoided printing money. The governor acknowledged that actual non-performing loans had been understated for a long time. “We have introduced transparency. The real NPL figure exceeds 35 percent—uncomfortable but truthful,” he said.

Dr Mansur said the bank has already restructured the leadership of 14 banks, initiated processes to merge five banks, resolved 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 strengthen central bank autonomy and accountability.

KhaborwalaAJ