New Bangladesh Bank governor: Can the 'dark horse' win the race?

When the news broke on Wednesday noon that Bangladesh Bank Governor Ahsan H Mansur was being replaced by someone named Md Mostaqur Rahman, Dhaka's newsrooms were caught in a state of confusion: the sky of the information world appeared cloudy.  

The question swirling in journos' minds was: Who is Mostaqur Rahman? Initially, it was discussed that a Bangladeshi professor of economics teaching at a US-based university was going to replace Mansur.

A quick Google search by some of my colleagues in the newsroom failed to gather anything about the said economics professor. 

Confusion over namesake spread too. Journalists working in the banking and business beats even sent congratulatory messages to Mostakur Rahman, a director of the Bangladesh Financial Intelligence Unit (BFIU), thinking he was being appointed as the next governor. A number of media outlets even posted his name with a photo on their social media pages introducing him as such.

Only in the afternoon did the clouds clear up. It was then known that none but a garment exporter, the CEO of Hera Sweaters Md Mostaqur Rahman, would take helm of the central bank.

The changeover came a week after the BNP-led new government began its journey following a landslide victory in the 12 February election. In the highly polarised electoral race, the fairness and rules of which have been questioned by opposition parties, no "dark horse" was able to rise.

But Mostaqur Rahman's appointment as the new central bank governor seems to be a lot more than the rise of a dark horse, having surprised bankers, businessmen, economists, and politically aware citizens alike.  

For the first time in the country's history, a businessman has become the Bangladesh Bank governor — a post that has been held by either economists, bureaucrats or career bankers since its inception in 1972.

One of its former governors, Fakhruddin Ahmed, an economist and civil servant, went on to become the head of the caretaker government in 2007.

Fakhruddin's successor in the central bank, Salehuddin Ahmed, became finance adviser to the immediate past interim government led by Nobel laureate Muhammad Yunus. The interim government appointed Ahsan H Mansur as central bank governor in August 2024 and tasked him with salvaging bleeding banks and repairing the financial sector.

To allow Mansur, aged 72, to be in this position, the Financial Institutions Division (FID) of the Finance Ministry amended a law, extending the age limit from 67 years.

A former IMF economist, Mansur took charge after the collapse of the Hasina regime in an uprising left the financial sector in shambles. His immediate predecessor Abdur Rouf Talukder had gone with the wind along with the regime change.

Mansur has since been credited for diagnosing financial ills and tackling distressed assets. By the time he left office on Wednesday noon, the financial situation had somewhat stabilised. He also initiated some long-term reforms in the banking sector.

But earlier, the end of the interim government's tenure had sparked speculation as to whether Ahsan Mansur would be allowed to continue after the BNP government took office.

However, his tenure was cut short abruptly; none of his predecessors, except Abdur Rouf Talukder, experienced such an unceremonious exit, something which triggered strong outcry as well.    

The other side of the episode is appalling. His replacement was announced at a time when central bank officials were protesting against some of his actions and forced him to leave his office building on Wednesday afternoon. Getting into his car, he told journalists, "I have not resigned, nor have I been removed. I saw it in the media, so I am going home."

The incident does not match the new government's strong warning against mobs, which was widespread during the interim government's tenure.

Mostaqur Rahman's appointment, meanwhile, has been questioned by some legal experts, who say his appointment is a clear breach of the conflict of interest rule.

Long live FID!  

Before and after taking charge of the finance ministry, Amir Khasru Mahmud Chowdhury spoke about dissolution of the FID to ensure independence of the banking sector.

At an event on 27 October last year, he had said the division was created to control state-owned banks, with the purpose of appointing managing directors and placing favoured individuals on boards to enable looting, Prothom Alo quoted Khasru as saying.

He recalled that the BNP had dissolved the division during its last term in office, but Sheikh Hasina later reinstated it. The party will once again abolish the division if it forms the next government, he said.

Amir Khasru stated that full independence, not merely autonomy, must be granted to the Bangladesh Bank if reforms are to be introduced and discipline restored to the financial sector.

Finally, the FID on Wednesday afternoon issued a gazette notification appointing the new governor, ending the governorship of Ahsan Mansur abruptly.  

The finance minister seems to have bet on a dark horse — a candidate or competitor about whom little is known but who unexpectedly wins or succeeds, according to Oxford Dictionary — to revive the economy and streamline the financial sector.

A dark horse, either in game or politics, can rise and win only if the rules of the game are applied fairly.

But in this case, that will depend on how "winning" is defined. If it means lowering interest rates to satisfy the business community, the new governor is likely to win. If winning means maintaining the central bank's integrity and taming inflation, his businessman background will come under scrutiny.

The last meeting

On 23 February, Ahsan H Mansur met the new finance minister at the secretariat and held a one-on-one meeting. Emerging from the meeting, Mansur said he had briefed the minister on the progress of various reform initiatives undertaken over the past several months.

The new government will continue ongoing banking reforms, Mansur said, quoting the finance minister. As the governor, he had another meeting with the finance minister on 24 February, the day before his removal.

On Wednesday, Finance Minister Khasru said the change in the governorship of the central bank was part of a broader administrative reshuffle undertaken by the new government to implement its priorities and policy agenda.

"Changes have not taken place in Bangladesh Bank only; they have occurred in many places also," he told reporters at the Secretariat, reports UNB. 

But the glaring question remains unanswered: Why was Ahsan Mansur shown the exit door in such an unceremonious manner?

Is it for his strong stance against lowering interest rate though businessmen were arguing that higher interest rate has made doing business expensive?

The Bangladesh Bank, under his leadership, maintained tight monetary policy to fight persistently high and untamed inflation.

In the current monetary policy announced on 9 February, the central bank continued a tight monetary stance as it saw several near-term inflation risks, including national elections, Ramadan and implementation of a new national pay scale for government employees.

"Moreover, excessive government borrowing has put the money market under pressure keeping money rates upward," said Ahsan H Mansur in the event of announcing the monetary policy.

Considering those inflationary risks, the Bangladesh Bank unveiled its new monetary policy for the second half of the current fiscal year by keeping the policy rate unchanged at 10%.

'Mad king' Trump vs Jerome Powell

For a long time in some advanced economies, there has been a growing understanding by policymakers that the best way to conduct monetary policy is for elected officials to set goals and for central banks to independently make the tactical decisions to meet those goals without political pressure.

In the US though, it was once somewhat common for presidents to complain openly about the Federal Reserve's policies with which they disagreed.

But since President Clinton's presidency, things have taken a different turn. Clinton took a position that he would not comment openly on Federal Reserve decisions. He stuck to that for the eight years of his presidency. His successor George W Bush stuck with that for the eight years of his tenure. And Barack Obama continued the tradition for both of his presidential terms as well.

This tradition was reversed after Donald Trump won in 2016.

It was Trump who appointed Jerome Powell as the chairman of the Federal Reserve in 2018. Powell was trained as a lawyer and at that time. Tensions between the US president and his own Federal Reserve chair appointee have hit a new high in 2025.

Some issues were like those faced by Bangladesh's central bank chief: Trump wanted him to fix Fed's key interest rate to help lower borrowing costs for credit cards, mortgages and other loans to deliver an economic boost. 

But Powell disagreed due to concerns about inflation and kept the rate unchanged. Trump argued that inflation has cooled and keeping rates too high could do unnecessary economic damage.

Jerome 'Jay' Powell holds one of the most powerful and influential positions in the world. As chair of the US Federal Reserve, he wields the levers which control global economic stability, such is the power of the US dollar. The position comes with a huge amount of autonomy. Fed independence is seen to be paramount. 

Despite butting heads with the registered Republican Fed chair, Trump did not remove Powell during his first term. The position has a four-year term and President Joe Biden nominated him to a second term in 2022. That gives Powell until 2026. 

"I was surprised, frankly, that Biden put him in and extended him," Trump has said.

But now, Trump sees Powell increasingly as a barrier to his agenda. Since Trump entered the White House in January 2025, he has told Powell to resign and threatened to fire him for not lowering interest rates.

In November, after the 2024 election, reporters asked Powell if he would step down or whether he thought Trump had the authority to fire him.

"Not permitted under the law," Powell remarked.

Trump, therefore, has no other way to remove Powell, whose term is set to end in May 2026. Even after that, Powell can remain on the board of governors until January 2028, meaning Trump will not get rid of Powell during the former's remaining period in the White House.

What was not possible for Trump in the US appeared to be a simple day-to-day affair in Bangladesh for the FID — removing a sitting governor and instantly announcing a new name in just two brief notifications issued simultaneously.