Stabilising financial sector a vital but tough task: governor

Bringing stability to the country's financial sector is very important but difficult, as it is not an easy task, Bangladesh Bank Governor Ahsan H Mansur today.

"I don't see any cloud in the external sector, but financial stability is still not an easy task," he said while speaking as a special guest at a discussion on the state of the Bangladesh economy, organised by the General Economics Division under the Planning Commission.

The interim government has taken several reform agendas to bring stability to the financial sector, according to the governor.

He informed that they are taking initiatives to reform the Bank Company Act, have issued the Bank Resolution Ordinance, and have restructured the boards of several banks.

"We also have to make the next government accountable for these things because these are significant progressions."

The BB governor said they hope the existing government will carry on these legal proceedings, although there is an expectation in some circles that after the national elections, they might seek a better settlement.

"There were so many challenges when I assumed office as governor," he said, adding that there was no stability in the foreign exchange market, and corresponding banks were increasing their fees, with some suspending business with Bangladeshi commercial banks.

But the situation has improved now, he said, adding that they have overcome those challenges over the last 16 to 17 months.

Forex reserves had dropped to $17–18 billion but have now increased by $10 billion, Mansur informed.

The central bank governor indicated that the policy rate would not come down until inflation reaches a tolerable level.