Bangladesh Bank Governor Dr. Ahsan H. Mansur expressed optimism that inflation would decrease to 7% by June and further to 5% in the next fiscal year. Speaking as the chief guest at an investor conference organized by BRAC EPL and Asian Tiger Capital Partners at Sheraton Dhaka on Thursday night, he highlighted the government’s measures to curb inflation. These include adopting a strict monetary policy and removing import tariffs on essential food items. However, he cautioned that if inflation does not decline by January, the monetary policy might need to be tightened further.

Dr. Mansur identified inflation as a critical challenge, noting that despite the government’s and Bangladesh Bank’s best efforts, inflationary pressures persist. To tackle the issue, the central bank has refrained from printing money for the government, which has instead relied on borrowing from banks while reducing expenditure to maintain fiscal discipline. Supply disruptions caused by prolonged monsoons and floods have delayed the availability of key crops like onions and potatoes, but prices are expected to normalize within two months as harvests improve.

Addressing economic challenges, Dr. Mansur cited external sector weaknesses, inflation, and the fragile banking sector as primary concerns. He stated that the interim government inherited a $2.5 billion trade payment shortfall and dwindling reserves. Efforts to resolve import-related issues have significantly reduced outstanding LC payments from $2.5 billion to $300 million, with a target to eliminate all arrears within a month. Highlighting systemic issues in the banking sector, he pointed to past mismanagement, including state-backed loan irregularities and capital flight. The governor underscored ongoing efforts to recover laundered funds in collaboration with international partners like the U.S. Treasury and the World Bank.

Dr. Zahid Hossain, presenting the keynote paper, emphasized that while monetary policy plays a role in managing inflation, market regulation and addressing governance issues are equally critical. Other panelists, including Professor Mostak Hossain Khan and BRAC Bank MD Selim R.F. Hossain, stressed the importance of structural reforms, enhanced governance, and restoring public trust in economic management.