Dhaka: Bangladesh Bank (BB) Governor Ahsan H Mansur today expressed confidence that inflation can be brought below the 5 percent mark by the end of the current fiscal year 2025-26 (FY26), which would allow for a gradual reduction in interest rates. Speaking at an event titled ‘Investment Dialogue with Local Partners,’ organized by the UNDP and the Bangladesh Investment Development Authority (BIDA) at BIDA headquarters, Mansur emphasized the central bank’s focus on stabilizing inflation and restoring positive real interest rates.
According to Bangladesh Sangbad Sangstha, Mansur addressed concerns from business leaders regarding the high cost of borrowing, suggesting that a decrease in inflation to 5 percent within this fiscal year could lead to a reduction in interest rates. He highlighted that prolonged negative real interest rates have resulted in economic distortions and macroeconomic pressures.
With headline inflation slightly above 8% and elevated food inflation, Mansur stressed that monetary tightening must continue for several more months. He mentioned that recent efforts by the central bank to rationalize and unify the exchange rate system have already enhanced stability in the foreign exchange market.
Mansur remarked, “We now have a proper value for the taka. We have already corrected what needed to be corrected. A stable and transparent exchange rate regime is crucial to rebuilding confidence.” He also noted that the taka has stabilized at a more competitive level recently, reversing earlier volatility, and that market discipline has significantly improved compared to six months ago.