Bangladesh Bank Governor Dr Ahsan H Mansur on Monday stated that the country’s financial sector is demonstrating clear progress despite ongoing challenges. He highlighted that the central bank has implemented extensive reforms to restore stability in the banking sector, control inflation, and stabilise the exchange rate.
Dr Mansur spoke at a seminar on the publications “Bangladesh State of the Economy 2025” and “Sustainable Development Goals: Bangladesh Progress Report 2025.” He noted that when he assumed office, the country faced severe currency depreciation, falling foreign reserves, rising non-performing loans, liquidity stress, and disrupted trade flows. “Without stabilising the exchange rate, we could not succeed in controlling inflation,” he said.
He added that the exchange rate, which was around Tk 120 per US dollar at the time, has now stabilised under a fully market-based system. Foreign reserves, which had declined to roughly US$17 billion, have increased by around US$10 billion within a year.
The governor clarified that there is no scope for immediate interest rate reductions. Even with inflation falling from 12.5 percent to just over 8 percent, maintaining a slightly positive real policy rate is essential. “Monetary policy will remain fully market-driven. Administrative control over interest rates is not an option,” he said.
He also explained that government borrowing pressures the money market, but Bangladesh Bank has refrained from printing money. The actual non-performing loan figure had long been understated; now transparency has been introduced, showing an NPL of over 35 percent.
Dr Mansur further noted that Bangladesh Bank has restructured the leadership of 14 banks, initiated the merger process of 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 autonomy and accountability.
AJ