During a discussion on the economy’s performance in the first 100 days of the interim government on 16th November experts stressed the need for immediate action to address the banking sector’s crisis. They suggested providing liquidity support, merging weak banks with stronger ones, or opting for liquidation to protect depositors. A research director from the Bangladesh Institute of Development Studies (BIDS) criticized the central bank’s abrupt cessation of liquidity support, which had previously stabilized ailing banks. Publicly disclosing the poor state of banks has further panicked depositors, leading to withdrawals. The central bank’s tightening monetary policy to control inflation was questioned, with experts advocating for a more accommodative approach tailored to Bangladesh’s economic context.
The legacy of the previous government’s 9-6 interest rate policy, withdrawn in 2023, was blamed for stagnant investment and rising non-performing loans. Business leaders urged the interim government to focus on immediate measures, such as strengthening money loan courts, while prioritizing economic diversification beyond the garment sector.
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