Economic adviser Dr Salehuddin Ahmed has underlined that reducing interest rates is far from a straightforward task. According to Dr Ahmed, setting interest rates is a highly complex process, closely intertwined with other financial instruments such as treasury bills and savings certificates. Adjusting one element of the financial system can have far-reaching consequences for the rest, meaning that sudden changes to interest rates can be risky.
Recent developments, however, have shown a decline in the yield of treasury bills from 12 per cent to 10 per cent. Experts suggest that this reduction has contributed to a renewed sense of stability within the banking sector, signalling a positive trend for 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 launch ceremony included remarks from prominent figures such as 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 explained, “Altering interest rates is akin to pressing a balloon: pressure 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 effectively managed.”
Dr Hossain Zillur Rahman highlighted 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
Good governance and accurate information
Abdul Hai Sarker noted that political control over certain banks has historically contributed to interest rate pressures, though he expressed confidence that government intervention could help stabilise the sector. Finance Secretary Khairuzzaman Mozumder added that previously, Letters of Credit required daily intervention at Bangladesh Bank, a situation that has now been resolved without bankruptcies.
2026 Interest Rates and Inflation Summary
| Financial Instrument | Previous Rate | Current Rate | Remarks |
|---|---|---|---|
| Treasury Bills | 12–13% | 10% | Stability improvement |
| Savings Certificates | 6–7% | 6–7% | No change |
| Inflation | 5.5% | 5.7% | Slight increase |
The Banking Almanac, published with support from Bangladesh Bank, continues to provide a critical reference point for understanding the trends, health, and evolving dynamics of the country’s financial sector. By analysing these indicators, policymakers, investors, and banking institutions can make informed decisions to sustain long-term stability.