BB aims to bring inflation below 5% this fiscal year: Governor Mansur
With headline inflation still slightly above 8% and food inflation elevated, the governor emphasised that monetary tightening must remain in place for several more months.
Bangladesh Bank Governor Ahsan H Mansur has expressed strong optimism that inflation can be brought below the 5% mark by the end of the current fiscal year, paving the way for a gradual reduction of interest rates.
Speaking at an investment organised by the Bangladesh Investment Development Authority (Bida) today (4 December) in Dhaka, the governor said the central bank's top priority is stabilising inflation and restoring positive real interest rates – conditions he described as essential for a sustainable rebound in private investment.
Responding to concerns from business leaders about the high cost of borrowing, Mansur said, "If inflation comes down to the 5% level within this fiscal year, we can begin reducing the interest rate. But it cannot happen the other way around. High inflation with low interest rates is wishful thinking."
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He noted that real interest rates had remained negative for an extended period, contributing to economic distortions and macroeconomic pressures. With headline inflation still slightly above 8% and food inflation elevated, the governor emphasised that monetary tightening must remain in place for several more months.
Mansur added that the central bank's recent steps to rationalise and unify the exchange rate system have already improved stability in the foreign exchange market.
"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 said.
He also noted that the taka has stabilised at a more competitive level in recent weeks, reversing earlier volatility. Market discipline, he argued, is now significantly better than even six months ago.
