Reserve crisis won’t disappear overnight: BB Governor
![Reserve crisis won’t disappear overnight: BB Governor](https://cdn.jagonews24.com/media/imgAllNew/BG/2023March/bb-governor-ahsan-h-mansur-20240814170034.jpg)
Bangladesh Bank Governor Dr Ahsan H Mansur acknowledged the ongoing foreign currency reserve shortage, stating that the crisis will not be resolved overnight.
He assured, however, that the supply of dollars in the market will be maintained at reasonable levels. "I will engage with development partners to help boost our reserves," he told reporters on Wednesday (August 14) after a meeting at the Secretariat aimed at reviewing inflation and food supply.
The meeting, presided over by Finance Adviser Salehuddin Ahmed, focused on strategies to bring inflation down to a tolerable level.
In response to questions about the reserve crisis, Dr Mansur said, "The reserve crisis is real, and it won't vanish immediately. We need to carefully calculate how much we can supply to the market while maintaining a minimum reserve."
He emphasized the importance of not reducing foreign exchange supply to an unreasonable level, as it could undermine market confidence. "We must ensure the maximum possible supply to support imports and fulfill necessary payments, as future imports depend on maintaining these payments," he added.
Dr Mansur noted the need for a cautious yet progressive approach, stating, "We must tread carefully but keep moving forward. These challenges are surmountable. We will consult with our development partners to explore ways to increase our reserves. With continued effort, we expect to see positive results in a few months."
When asked about potential banking sector reforms, the governor said, "Banking sector reform was not discussed today, but it is essential. The government will decide how to proceed, and Bangladesh Bank will collaborate with the government and stakeholders to create a roadmap."
He also mentioned options like mergers, recapitalisation, and policy changes as part of potential reforms, noting that each bank's situation must be carefully assessed.
Regarding inflation, Dr Mansur highlighted a three-pronged approach: increasing supply through production, addressing cost-push factors such as tax policy and market extortion, and managing demand, which Bangladesh Bank is already reviewing.
"We are facing a foreign exchange shortage, which limits our import capacity and affects the market," he said.
"If we can reduce market extortion and boost production, I believe we can bring inflation to an acceptable level within 5-6 months. We need to work diligently and give it time," the governor added.
MAS/NMA