Bangladesh’s economy is showing signs of stabilisation, but significant vulnerabilities remain, Bangladesh Bank Governor Dr Ahsan H. Mansur said on Wednesday.

Speaking to reporters at the Secretariat, the governor noted that although key macroeconomic indicators have improved in recent months, deep-rooted structural weaknesses in the financial sector continue to pose challenges.

He said the unprecedented irregularities and alleged misappropriation in the banking and financial sectors over an extended period cannot be fully repaired overnight. “Restoring normalcy will require time and sustained policy efforts,” he added.

Call for Investment, Reforms

Dr Mansur urged the newly formed government to take bold and effective measures to boost investment in order to overcome the lingering crisis and accelerate national growth.

On inflation, he said that although the government is making concerted efforts to bring it down to 7 percent, the desired target has not yet been achieved. More time will be needed to stabilise market conditions and protect consumers’ purchasing power, he observed.

The governor also expressed hope that reform initiatives undertaken by the previous interim administration would be carried forward at full pace by the elected government led by Tarique Rahman.

Optimism Over Foreign Exchange Reserves

Despite ongoing challenges, the central bank chief voiced optimism about the country’s foreign exchange reserves. He said reserves are expected to cross the $35 billion mark within the current month and could reach $40 billion before the end of the year.

Such improvements in the external sector would help restore confidence in the broader macroeconomy and strengthen Bangladesh’s position in international trade, he said.

Banking Sector a Major Challenge

Dr Mansur identified banking sector reform and recovery of non-performing loans as among the new government’s biggest challenges. He stressed the need for close coordination between Bangladesh Bank and the Ministry of Finance to address systemic fragility.

The country’s current economic challenges and the issue of reserve growth are also expected to feature prominently in discussions at the first meeting of the new cabinet later on Wednesday.

“If sound policymaking and good governance can be ensured, the economy will rebound swiftly and public suffering will ease,” the governor said.