Bangladesh Bank Governor Ahsan H Mansoor said that even if some banks are in a fragile state, we can change the face of Bangladesh’s economy within the next one year. He said this in a recent interview.

The governor said, our first responsibility is to bring the country’s economy to a stable state. So that inflation is between 5-6-7 percent. Also, keeping the dollar exchange rate fixed around 120 taka. Increasing the foreign exchange reserves by making them more stable.

Ahsan H. Mansoor said that Bangladesh Bank’s main responsibility in terms of economy is to reduce inflation. In the past, inflation had gone up rather than down due to policy missteps. Here we have to work. There has been a large volatility in the balance of payments over the past two years. It has to be dealt with. Hopefully, I can change the face of the economy within a year.

The central bank governor said that our main target is to bring down inflation to 7 percent by the end of the current financial year. The target will be met by April-May. After that we will try to bring it down to 6 or 5 percent. If we can bring inflation down to 5 percent, we can certainly bring down interest rates. If the interest rate comes down, we can create a demand in the market and increase the flow of loans.

He said that the new interest rate has been fixed by increasing 50 basis points from the existing policy interest rate of 8.50 percent in the country. This month we will take it to 9.50 percent, next month we will take it to 10 percent. This is our plan.

The governor also said that inflation makes the rich richer and the poor poorer. Those who have wealth increase in wealth. The income of those who are dependent on income decreases. Purchasing power decreases. 4-5 percent inflation has never happened in the history of the country. If we can, it will be a big achievement for the government. We are working towards that goal.

He said that the exchange rate of taka against the dollar is now 120 taka. It has been stable for three months. Now there is no difference with the open market. The dollar is lower in the open market after the bank’s stimulus to expatriate income. This has never happened in the history of Bangladesh. Now if you send remittance through legal channel you will get more money than illegal channel. This is the first thing we see. This is the positive side

Ahsan H. Mansoor said that we have reserves to cover three months of import expenses so far, it must be kept as it is or increased. In the past 1 to 1.1 billion dollars was released from the reserves to the market. I haven’t left a single dollar in the market in the last one month. I bought something on the contrary. Our foreign exchange market is big. 75-80 billion dollars are required to meet import expenditure. Another 5 billion is paid in the service sector. All in all it cost us about 90 billion. About 50 billion dollars comes from our export earnings there. Remittance is about 24 billion. Another 5-6 billion comes in the service sector. I want everyone to meet their expenses from this 80 billion.

Regarding the repatriation of money laundered from the country, the governor said that a big industrial group had captured all the Islamic banks in seven years from 2017. After taking control, they took out huge wealth and smuggled it abroad. A part of their wealth is still in the country. We think that one family may have taken 1 lakh 15 to 20 thousand crore taka. Two or three other groups together have taken out 2 lakh crore taka and smuggled them abroad. We will try how we can get the resources back.

Regarding the future of Islamic banks in the country, the governor said that two strong Islamic banks will be established in the country. Among them there is a bank called Islami Bank Bangladesh Limited. I have requested the International Finance Corporation to invest in it. If they own 5 to 10 percent shares, others will take 50 percent shares. It will fully implement the compliance of the bank. Will turn around again. Apart from this, smaller Islamic banks will be merged to create one big and strong Sharia-based bank.

Ahsan H. Mansoor also said that there is a regulatory agency for the banking sector, the Central Bank. Multiple controllers present a variety of problems. As part of the banking sector reform, the central bank will be strengthened by freeing the banking sector from the financial institutions department.