Rate reset, reopening factories key priorities

Resetting higher interest rates and helping in reopening closed factories through default loan rescheduling and fresh working-capital lending are among first priorities set by the newly appointed Bangladesh Bank governor.
Explaining Governor Mostaqur Rahman's directions to the central bank's hierarchy on the first day of takeover Thursday, a BB spokesman said the regulator would oversee the contingent financing operations by the commercial banks.
He said the new Governor, Mostaqur Rahman, targets expansion of economic growth alongside job creation through banking on the ongoing macroeconomic stability.
To achieve the goal, the governor said, the central bank would revisit higher interest-rate structure along with initiative to help reopen closed factories in an effort to stimulate economic activity and create employment.
On his first working day at the BB, the BB chief shared his thought in an informal meeting with deputy governors and executive directors at the central-bank headquarters after officially signing his appointment documents.
During the meeting, Mr. Rahman, who replaced Dr Ahsan H. Mansur following his unceremonious exit amid protests from a section of the central bankers on Wednesday, outlined a preliminary roadmap for strengthening the economy and also improving the functioning of the central bank.
The new governor drove in the BB headquarter at 10:40am and left his office at 1:55pm while the BB spokesperson was briefing reporters.
On his arrival at the BB, waiting newsmen started hurling questions, but the governor didn't answer any and went inside the bank building flanked by high officials
Meeting with the newsmen on the first day of takeover has been customary on the part of a new BB governor.
Later in the afternoon, BB spokesperson and Executive Director Arief Hossain Khan briefed journalists on behalf of the governor. He said the central bank would take policy measures to support the reopening of closed industrial units, emphasizing that restarting factories would help generate employment and accelerate economic growth.
According to the spokesperson, the central bank plans to encourage commercial banks to provide policy support, including loan rescheduling for default borrowers and fresh working-capital loans to restart operations.
He notes that "while individuals may be at fault, institutions and factories could still be kept operational in the interest of the broader economy".
Numerous industrial units have remained closed following recent political changes, including businesses linked to major conglomerates such as Beximco Group, owned by Salman F Rahman, as well as S Alam Group and Nassa Group.
Many of the factories reportedly shut down after their owners went into hiding, left the country, or faced legal action following the political upheavals and uprising. Responding to questions as to why new loans would be provided to reopen such factories, the spokesperson said the decision was driven by economic necessity.
He warns that prolonged factory closures could lead to large-scale unemployment and social instability, adding that Bangladesh Bank would supervise banks to ensure proper loan disbursement.
The spokesperson said the governor hailed the previous governor and the finance adviser of the just-past interim government for saving the economy from the brink of collapse and trying to move towards a growth-oriented economy. But they have not been successful, though.
"Now, the prime objective of the governor is to create jobs keeping the economy stable. For this, some parameters like higher interest rate and inflationary burden need to be addressed," the BB spokesperson said, quoting the new governor.
He is expected to communicate with the media primarily through the central bank's spokesperson unless direct engagement becomes necessary.
The central bank spokesperson said maintaining discipline and good governance within the central bank would be among the governor's top priorities.
A new central-bank governor traditionally talks with reporters on the first day of taking charge. But Mr. Rahman acts differently this time around--sharing no words with the media.

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