The Bangladesh Bank governor, Salehuddin Ahmed, has recommended improving negotiation capacity of Bangladeshi officials for signing any deal with multilateral lending agencies like the International Monetary Fund and the World Bank.
‘We have rejected at least four IMF suggestions during my four-year tenure,’ he told reporters at his farewell briefing at the central bank on Tuesday.
‘We have not criticised in general the directives of the IMF and pointed out their faults on their grounds for not following their suggestions,’ said Salehuddin, whose term with the Bangladesh Bank expires tomorrow.
The incumbent governor or the central bank suggested the officials concerned of doing homework properly before going for any deal with the lending agencies who stress on introducing a tight monitoring policy, increase in CRR, adopting policy support instrument and opening of capital account.
Salehuddin, the first government official to disclose the attempt of signing PSI agreement with the IMF in 2007, admitted that the lending agency had insisted on entering into such an agreement.
Regarding question on facing global recession Salehuddin said, ‘There was no capital outflow from Bangladesh in the recession period. We stayed safe because of not allowing opening of capital account,’ he added.
He cited example of India from where billions of dollars went out because of capital account.
‘The country’s long and medium term economic policy should be inward looking to reduce poverty alleviation besides short term policy to stem the current impact of global meltdown,’ he pointed out regarding question on facing global recession.
The governor said the government had inward development strategy, as the GDP growth was mostly dependent on domestic economy.
‘The long-term economic policies should be undertaken in a manner that would help generate income of the people, rapid industrialisation, create employment opportunities and ensure access to finance,’ Salehuddin added.
The governor, however, said that ad hoc policy measures would have to be taken to support exports, although the sector had less significant contribution to the economic growth than internal sectors.
He further said the immediate challenge of the economy was to face the recession, but the country’s long term goals like poverty alleviation should not be overlooked.
Replying to a question, he said the central bank had tried to reduce the interest rate spreads through moral persuasion, but later dictated the lending rate as the situation changed due to the recession as Bangladesh was good example of good policy mix as acclaimed worldwide.
Asked about his failure during the last four years, the governor said the pace of automation had been slow and was not up to the mark as per his desire while he could not implement another desire that BB would make economic projection like others do. Replying another question, he said the central bank had to face no conflicts over policy decision during the first four months of the present government.
In reply to another question, he said the financial stimulus package was a first step measure as per the country’s capacity. Follow up measures could be taken later as soon as the situation becomes clears and the situation would be clear by June this year.
The financial sector remained quite stable while the foreign exchange reserve stood at a comfortable level, rising to the record highest at $6.4 billion as of Tuesday. |
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