Moody’s Ratings telling an outdated story of Bangladesh: BB governor

The central bank Governor Ahsan H Mansur has criticised Moody's Ratings' recent downgrade of Bangladesh's credit rating, stating it reflects an outdated assessment of the country's economic situation.

"Moody's Ratings is telling an outdated story of Bangladesh, it's not updated," he remarked in response to a question at a webinar titled "The State of Investment Climate in Bangladesh" organised by the Bangladesh Investment Development Authority (Bida) yesterday. He featured in the webinar as the guest of honour.

Last month, Moody's lowered Bangladesh's long-term ratings to B2 from B1, revising the outlook from "stable" to "negative." 

Addressing this, Ahsan H Mansur argued, "The downgrade was announced at a time when forex reserves are stabilising, the US dollar selling spree has stopped, exchange rates have stabilised, and the balance of payments deficit is narrowing."  

He argued that the rating agency's assessment failed to capture the improving economic indicators, adding, "That is our objection against the assessment of the rating agency."

Moderated by Chowdhury Ashiq Mahmud Bin Harun, executive chairman of Bida and Bangladesh Economic Zones Authority, the session brought together policymakers, investors, and stakeholders to discuss challenges, reforms, and opportunities in Bangladesh's evolving economic landscape.

Country's economy and banking reform

While talking about the country's economy, the Bangladesh Bank governor acknowledged high inflation as a challenge but expressed optimism about its decline in the coming months, citing falling food prices.

He also noted that tighter monetary policies have made the Bangladeshi taka a more attractive asset. 

Talking about efforts to attract foreign direct investment (FDI), he assured investors that the central bank is committed to maintaining a stable macroeconomic environment, robust reserves, and reliable profit repatriation mechanisms.

During the webinar, Ahsan H Mansur was asked to highlight the steps that are being taken to revive the country's banking system.

In reply, he said, "First and foremost, the governance of the banks must be improved."

"It's unacceptable that a single family, backed by political support, was able to control about seven banks and three non-financial institutions completely against the rules of Bangladesh Bank. That era must come to an end."

He added, "We have formed three task forces. The first is focused on assessing asset quality, supported by the World Bank and the Asian Development Bank. This review will begin in December, and it will be followed by efforts to recover assets. The second task force aims to strengthen the operations of Bangladesh Bank."

"With these steps, we believe the banking sector will get back on track. We are also providing liquidity support to banks, and we hope that some of them will overcome their current problems," he added.

Ahsan H Mansur further expressed optimism about Bangladesh's economic prospects, urging international observers to visit the country and witness its transformation firsthand instead of relying on outdated perceptions. 

He reassured that concerted efforts are underway to stabilise the economy and strengthen key sectors, promising a future of sustained growth and prosperity.

Bida's vision for an inclusive investment climate

In his opening remarks, Bida Executive Chairman Chowdhury Ashiq Mahmud Bin Harun emphasized the government's commitment to creating a business-friendly environment. 

He presented Bida's recent initiatives, including regulatory reforms, improved public-private collaboration, and solutions to inefficiencies in the One-Stop Service (OSS) system.  

To address barriers such as corruption, inconsistent policies, and resource shortages, Bida has introduced innovative programmes like the "Project Ambassador" initiative. This project, which resolves investor-specific challenges through rapid-response teams, has already yielded success, converting major investors like the Young One Group into advocates for Bangladesh.