New BB governor hints at policy rate cut, pledges factory support

Bangladesh Bank’s newly appointed Governor Mostaqur Rahman on Thursday hinted at a possible cut in the central bank’s policy rate and pledged support to revive factories shuttered amid political unrest under the interim government.

On his first day in office, a day after his appointment, the new governor held a meeting with deputy governors and executive directors at Bangladesh Bank to outline his vision and priorities.

Speaking at a press briefing after the meeting, central bank spokesperson Arief Hossain Khan said the governor emphasised maintaining macroeconomic stability while steering the economy towards inclusive growth.

“The Governor stressed the need to keep macroeconomic stability intact and move towards inclusive growth to generate employment. High interest rates are a major barrier to employment generation and investment. He has addressed the necessary course of action in this regard,” Arief said.

The governor also assured all-out cooperation to restart industrial units that were closed during the period of political instability. Bangladesh Bank will extend policy support, facilitate required financing and strengthen coordination within the banking sector to help resume production, which is expected to boost employment and output, the spokesperson added.

“Containing inflation and ensuring price stability within consumers’ purchasing capacity will remain a priority, Governor noted the issue of elevated lending rates that are constraining investment will be reviewed for appropriate action,” Arief said.

To ensure good governance at the central bank, governor instructed that decision-making processes be fully rule-based and non-discriminatory. He also decided to enhance the delegation of authority to expedite operations by empowering officials at different levels with greater decision-making capacity.

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Mostaqur joined the central bank as the 14th governor on Thursday, succeeding Ahsan H Mansur. He is the first full-fledged businessman to assume the top position at the central bank, unlike his predecessors who were career bureaucrats or professional economists.

Responding to questions about his background, the spokesperson said, “A governor’s academic discipline is not the main issue. He has assumed office through due process. The governor’s core responsibility is to formulate monetary policy. It is not rocket science. There is a research team to assist him.”

Arief also said the governor expressed reluctance to engage in regular media briefings. “The governor holds the highest position in a regulatory body. His words carry weight. He will not brief journalists every day. However, he may speak at formal briefings when necessary.”

The governor underscored the importance of stronger coordination with other regulatory bodies and the Ministry of Finance to tackle economic challenges through a unified approach, and called for collective efforts to uphold the central bank’s reputation and strengthen the economy.

Later in the afternoon, the governor visited the Ministry of Finance to meet Finance Minister Amir Khasru Mahmud Chowdhury, marking his first meeting with the minister after assuming office.