Bangladesh Bank Governor Ahsan H Mansur at a high-level meeting on Wednesday, informed that inflation has dropped significantly, from 12.5 percent to 8.3 percent in recent months.
“We cannot restore the overall health of the banking sector properly yet, though ongoing reforms are gradually showing progress. But, some positive outcomes are already visible,” he said.
“Bangladesh now holds foreign exchange reserves equivalent to five months of imports. Inflation has dropped significantly—from 12.5 percent to 8.3 percent,” he said, adding that the inflation could have fallen further to around 7 percent in the last one or two months, but a temporary rise in rice prices prevented that.
The central bank chief said this at the meeting of the National Steering Committee formed to implement and monitor the smooth and sustainable transition strategy of Bangladesh from the LDC status at the Chief Adviser’s Office in the city’s Tejgaon area with Chief Adviser Professor Muhammad Yunus in the chair.
Chief Adviser’s Press Secretary Shafiqul Alam, later, briefed the reporters at the Foreign Service Academy here about the details of the meeting this afternoon.
Mansur, however, said that rice prices have begun to decline again and hoped that the inflation would continue falling in the coming days.
About non-performing loans (NPLs), he said the NPLs have reached around 24 percent, a situation largely caused by the large-scale corruption and looting of banks during the previous government led by Sheikh Hasina, which badly affected the overall health of the banking sector.
Referring to the legacy issues of the past, the governor reiterated that the surge in NPLs was mainly due to the massive bank thefts and irregularities during the Sheikh Hasina regime, when millions of dollars were embezzled.
The central bank has now set a target to reduce NPLs from the current 24 percent to a level between 4 and 5 percent, Mansur added.
As part of financial sector restructuring, he said, five Islamic banks will be merged, and nine non-banking financial institutions (NBFIs), also known as leasing companies, will be phased out.
To encourage innovation and entrepreneurship, a venture capital fund of Taka 900 crore is being established by commercial banks, with Bangladesh Bank contributing an additional Taka 600 crore, the governor informed the meeting.
Mansur also emphasized the need to promote a cashless transaction system in Bangladesh to boost revenue and reduce cash-handling costs.
Bd-Pratidin English/ AM
