The new Bangladesh Bank (BB) governor assured that the money market will operate based on demand and supply with minimal interventions, differing from previous practices. In a meeting with leading commercial banks, the governor emphasized that exchange and interest rates would be determined by market forces rather than central bank directives. The chairman of The Association of Bankers Bangladesh Limited (ABB) praised the governor’s professional background and commitment to resolving sector challenges, criticizing past central bank officials for supporting irregularities that stressed the banking industry. The ABB chairman also noted the governor’s plan for a contractionary monetary policy to control inflation and hinted at adjusting the policy rate to close the gap with government securities rates. Foreign exchange reserves are currently over $20 billion, covering about three and a half months of import bills. The governor has urged banks to focus on cash recovery to address non-performing loans and suggested that poorly governed banks should be allowed to fail rather than receive continued bailouts.
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