Salehuddin prioritises stabilising banking sector, rejuvenating economy

Finance and Planning Adviser Salehuddin Ahmed is placing the highest priority on stabilising the banking sector and rejuvenating the country's overall economic activities.

"Running the economy and restoring order in the banking sector is my top priority," he said in response to a question from The Business Standard on Monday.

Salehuddin said he will focus more on improving people's living standards than on macroeconomic indicators.

He mentioned that he had instructed banks to open letters of credit (LCs) for import of fuel oil, gas, fertilisers, food products, and industrial raw materials immediately upon assuming charge as finance adviser.

This measure aims to maintain agricultural and industrial production, increase the supply of food products, and control inflation, said the adviser on his second working day after taking charge.

"Banks were not opening LCs for fertiliser imports, but these issues have all been resolved. I addressed this on my first day. Imports of fertilisers, fuel, and agricultural and industrial raw materials – nothing will be blocked. Imports of all goods related to lifestyle and industrial production will continue normally," he added.

The adviser said his immediate task is to restore order in the banking sector, which is currently plagued by significant instability.

Specifically, he emphasised the need to complete the appointments of the governor and deputy governors of the Bangladesh Bank and to appoint a new chairman for the Bangladesh Securities and Exchange Commission.

Economists have previously recommended the formation of a banking commission to identify irregularities in the sector. When asked whether the current government will set up such a commission, he responded, "Let the banks function first. The formation of the commission will be considered later."

Regarding steps to control inflation, Salehuddin, who previously headed the Bangladesh Bank as governor, noted that the central bank alone cannot manage inflation.

He explained, "We have the food ministry, the commerce ministry, and the agriculture ministry involved in product supply and market monitoring. We will collaborate with these ministries to tame inflation."

He added, "We will work on increasing the production and supply of goods to manage inflation."

Salehuddin also said while macroeconomic indicators show improvement for Bangladesh, they do not fully reflect the quality of life.

"I will focus on enhancing people's quality of life, comfort, mobility, health, education, social security, and future prospects. Specifically, I will work on creating employment opportunities, sources of income, and fostering entrepreneurship," he added.

He acknowledged that there is a shortfall in revenue collection due to various factors.

"I have already issued directives on increasing revenue collection and managing the budget deficit. It will take some time, but the situation should improve shortly," he said.