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BB works to bring inflation below 5% within FY26: Governor
Bangladesh Bank (BB) Governor Ahsan H Mansur today said that inflation can be brought below the 5 percent mark by the end of the current fiscal year 2025-26 (FY26), paving the way for a gradual reduction of interest rates.
“The central bank's top priority is stabilising inflation and restoring positive real interest rates,” he said while speaking at an event on “Investment Dialogue with Local Partners” organised by the UNDP and the Bangladesh Investment Development Authority (BIDA) at BIDA headquarters in the city.
Responding to concerns from business leaders about the high cost of borrowing, Mansur said, "If inflation comes down to the 5 percent level within this fiscal year, we can begin reducing the interest rate."
He noted that real interest rates had remained negative for an extended period, contributing to economic distortions and macroeconomic pressures.
With headline inflation still slightly above 8% and food inflation elevated, the governor emphasised that monetary tightening must remain in place for several more months.
Mansur added that the central bank's recent steps to rationalise and unify the exchange rate system have already improved stability in the foreign exchange market.
"We now have a proper value for the taka. We have already corrected what needed to be corrected. A stable and transparent exchange rate regime is crucial to rebuilding confidence," he said.
He also noted that the taka has stabilised at a more competitive level in recent weeks, reversing earlier volatility. Market discipline, he argued, is now significantly better than even six months ago, reports BSS.