Task force soon to monitor functioning of banks: BB Governor

Bangladesh Bank

The foreign exchange market has become steady with the Bangladesh Bank allowing about 2.5 percent difference in exchange rates at the central bank and the commercial banks, Bangladesh Bank Governor Ahsan H Mansoor said in Dhaka on Saturday evening.

Talking to a group of his Dhaka University batchmates on Saturday evening he also said that the inflation rate looks like coming down with the upping of interests rates. A tight monetary policy will continue to bring down the rate if inflation first to 6pc and then to 4pm to stabilise the macro economy.

Ahsan H Mansoor had a dinner meeting with his Dhaka University friends at the Gulshan North Club. He said that with the forex market becoming stable it was possible to supply the commercial banks with several hundred million US dollars during the past three weeks and this enabled the banks to promptly open LCs for clients.

A businessman friend present on the occasion informed the BB Governor he was pleasantly surprised that his bank issued an LC for 11,500 dollars on the same day he went to open the same. He was expecting a delay of at least three days as was the practice for the last few years.

Ahsan H Mansoor said his move to discipline the management of the Banks that were affected by undue interference by some business houses would continue. He said the boards of directors of such banks have been reconstituted and these have been functioning well. If they falter the boards will be reconstituted again.

He said that a task force is going to set up soon to monitor the operations of the banks and submit reports from time to time. 

Ahsan H Mansur said he raised interest rates to increase the value of the Taka with two objectives, to curb the rate of inflation and keep the exchange rate with dollar steady. This measure worked in the USA, Europe and also in India. When inflation rate will come down to desired levels the interest rate will be lowered, he added.