Dr Ahsan H Mansur, Governor of the Bangladesh Bank (BB), stated on Monday that the central bank has already implemented extensive reforms to restore banking sector stability, reduce inflation, and stabilise the exchange rate, despite facing numerous challenges.
"Despite the difficulties, the financial sector is moving towards a more sustainable footing with visible progress," he stated.
As the special guest, the governor addressed a dissemination seminar on the publication of the Bangladesh State of the Economy 2025 and the Sustainable Development Goals Bangladesh Progress Report 2025 at the NEC Conference Room in the city's Sher-e-Bangla Nagar area.
The event was organised by the Planning Commission's General Economics Division (GED).
The governor stated that when he took office, the country was facing a rapidly depreciating currency, declining reserves, rising non-performing loans, liquidity stress, and disrupted trade flows.
"I was always convinced that without stabilising the exchange rate, we would never win the fight against inflation," he said, adding that the exchange rate, which was around 120 taka per dollar when he took office, has since stabilised.
Under a completely market-based system.
Dr Mansur stated that Bangladesh's external position has now improved.
The current account is in surplus, the financial account is positive, and the total balance of payments is in surplus. "Reserves that had fallen to around US$17 billion have increased by about US$10 billion in one year," he said.
The governor made it clear that interest rates cannot be reduced immediately. Despite inflation dropping from 12.5% to just over 8%, he emphasised the importance of maintaining a slightly positive real.
Policy rate.
"Monetary policy will remain entirely market-based. "Administrative control over interest rates is not an option," he explained.
Dr Ahsan also stated that the government's borrowing requirements have put pressure on the money market, but Bangladesh Bank has strictly avoided money printing.
The governor admitted that the actual non-performing loan (NPL) situation had long been underestimated. "We provided transparency. The true NPL figure is more than 35% – uncomfortable but accurate," he stated.
The BB governor was confident that a significant reduction would be visible by December. The Bangladesh Bank has already restructured the leadership of 14 banks, initiated processes to merge five banks into one, and resolved nine non-bank financial institutions, as well as advanced key legal reforms such as the Deposit Insurance Act, Bank Resolution Ordinance, and amendments to the Bank Company Act, he said.
The Bangladesh Bank Order is also being reviewed to strengthen central bank autonomy and accountability.
Dr Mansur added that new merged banks may become profitable within the first or second year, depending on initial assessments. Strict governance rules, such as "no dividend, no bonus" for loss-making institutions, remain in place.
Officers in charge of loans that defaulted immediately will also face consequences.
The governor reaffirmed that no industry has been closed due to a lack of financing, including those associated with major defaulters.
Large power and industrial projects that were about to shut down unexpectedly were kept operational thanks to coordinated intervention.
The governor emphasised that the external sector is completely under control. ” But restoring financial sector stability will take time. The structural and legal reforms we have initiated must continue, and we hope the next government will uphold them,” he added.
