Bangladesh Bank Governor Ahsan H Mansur announced yesterday that the interim government aims to reduce inflation to 7% by June 2024 and below 5% in the next fiscal year.
Speaking at an event titled ‘Driving Changes: Unlocking the Potential of Bangladesh Financial Market,’ organized by BRAC EPL Stock Brokerage Ltd at Sheraton Dhaka, Mansur discussed measures to stabilize the economy and address inflationary pressures.
Mansur emphasized that the government has implemented all possible policy measures to curb inflation. While these measures have yet to impact inflation significantly, Mansur pointed out that it typically takes 12 months for inflation-curbing policies to yield results. If inflation does not improve by January, the central bank is prepared to tighten monetary policy further.
Mansur highlighted several economic challenges and outlined the government’s responses. Reserves have fallen to approximately $20 billion, prompting the central bank to halt interventions in the foreign exchange market. A market-determined exchange rate is now being prioritized to preserve reserves. Unsettled LCs have been reduced from over $2.5 billion to $300 million to eliminate all pending payments.
Mansur emphasized the importance of maintaining payment integrity, stating, “We do not want to tolerate a single non-payment issue.”
Economic Stabilization Efforts
While the interim government has introduced comprehensive measures, the effectiveness of these policies depends on the economy’s response over the coming months. Mansur underscored the need for patience, stating, “we are waiting for the economy to react to the doses of economic policy tightening.”
