Dhaka: Bangladesh Bank (BB) Governor Dr Ahsan H Mansur today announced that the central bank has initiated extensive reforms to restore stability in the banking sector, manage inflation, and stabilize the exchange rate despite facing multifaceted challenges. "Despite the difficulties, the financial sector is moving toward a more sustainable footing with visible progress," he emphasized.
According to Bangladesh Sangbad Sangstha, the governor made these remarks while addressing a dissemination seminar on the publication of the Bangladesh State of the Economy 2025 and Sustainable Development Goals Bangladesh Progress Report 2025. The event was organized by the General Economics Division (GED) of the Planning Commission and held at the NEC Conference Room in the city's Sher-e-Bangla Nagar area.
Dr Mansur highlighted the challenges faced when he assumed office, including a rapidly depreciating currency, declining reserves, rising non-performing loans, liquidity stress, and disrupted trade flows. He stressed the importance of stabilizing the exchange rate, which was around 120 taka per dollar when he took office, and noted that it has since stabilized under a fully market-based system.
The governor reported that Bangladesh's external position has now turned positive, with the current account in surplus and the financial account showing positive signs. Additionally, the overall balance of payments is in a surplus. Reserves, which had dropped to around US$17 billion, have increased by approximately US$10 billion in one year.
Dr Mansur clarified that there is no immediate scope for reducing interest rates. Despite a fall in inflation from 12.5 percent to just over eight percent, he emphasized the need to maintain a slightly positive real policy rate. He reiterated that monetary policy will remain fully market-driven, ruling out administrative control over interest rates.
He acknowledged past understatements of the non-performing loan (NPL) situation, revealing that the real NPL figure is over 35 percent. However, he expressed confidence that significant reductions would be visible by December. The Bangladesh Bank has restructured the leadership of 14 banks, initiated processes for consolidating five banks into one, and resolved issues for nine non-bank financial institutions. Key legal reforms, including the Deposit Insurance Act and amendments to the Bank Company Act, are also underway.
The governor added that new merged banks could become profitable within the first or second year, with strict governance rules in place. Officers responsible for loans that default immediately will be held accountable. He assured that no industry has been shut down due to a lack of financing, including those associated with major defaulters. Large power and industrial projects at risk of abrupt shutdown have been kept operational through coordinated intervention.
Dr Mansur emphasized that while the external sector is fully under control, restoring financial sector stability will take time. He urged for the continuation of structural and legal reforms and expressed hope that future governments will uphold them.