Bangladesh Bank Governor Dr Ahsan H Mansur on Monday stated that the country’s financial sector is showing visible progress despite multiple challenges. He said that extensive reforms have already been implemented to restore stability in the banking sector, control inflation, and stabilise the exchange rate.

The governor noted that upon taking office, the country faced severe currency depreciation, declining foreign reserves, rising non-performing loans, liquidity stress, and disrupted trade flows. “Without stabilising the exchange rate, we could not control inflation,” he emphasised.

At the time of his appointment, the exchange rate was around Tk 120 per US dollar. It has now stabilised under a fully market-based system. Similarly, foreign reserves, which had dropped to approximately US$17 billion, have risen to US$27 billion within a year.

He clarified that there is no scope for immediate interest rate reduction. Even with inflation easing, maintaining a slightly positive real policy rate is essential. “Monetary policy will remain fully market-driven. Administrative control is not an option,” he said.

Dr Mansur also highlighted that government borrowing pressures the money market, yet Bangladesh Bank has refrained from printing money. The actual non-performing loan figure had long been understated. Transparency now shows an NPL above 35 percent.

He further mentioned that Bangladesh Bank has restructured the leadership of 14 banks, initiated the merger of five banks, and resolved nine non-bank financial institutions. Key legal reforms, including the Deposit Insurance Act, Bank Resolution Ordinance, and amendments to the Bank Company Act, have also progressed. The Bangladesh Bank Order is under review to enhance autonomy and accountability.

The governor stressed that these initiatives are restoring stability and strengthening long-term investor and business confidence. “These reforms are challenging but will guide the country toward financial stability,” he concluded.