Bangladesh Bank Governor Dr. Ahsan H. Mansur stated that if a new pay scale is implemented without increasing tax collection, the government’s burden of bank loans will further increase, potentially fueling inflation.

He issued this warning on Monday (February 9) at a press conference held at the central bank’s head office while announcing the new monetary policy. The Governor noted that private sector credit growth has fallen short of expectations due to political instability and a lack of confidence. Despite budget cuts, the rate of borrowing from the banking sector has increased.

Dr. Ahsan H. Mansur also stated that the Bangladesh Bank Order needs to be amended to keep the banking sector free from political influence. He expressed hope that political parties would honor their electoral promises regarding economic sector reforms.

The Governor further informed that $4 billion has been purchased from the market in the current fiscal year, but no dollars have been sold from the reserves. Over the past four years, more dollars have been purchased for reserves than the IMF was expected to lend. He remarked, “We do not want to depend on others.”

Dr. Ahsan H. Mansur declared that successes have been achieved in other monetary policy indicators, except for bringing inflation down to 7 percent. He stated, “We have performed very well, only failing to control inflation. We hope this will also decrease in the coming days.”

He mentioned that no dramatic steps would be taken just because one goal was not achieved. The Governor said, “We will not reduce the policy rate at this moment. Our reserves are in a good position, and everything is in order according to IMF conditions.”

In the news, he expressed hope for an even better economy in the days ahead and also informed about the central bank’s readiness to maintain financial stability.