(Bloomberg) -- Bangladesh’s interim government appointed a former official of the International Monetary Fund as the new central bank governor, bringing firepower to the team negotiating with the multilateral lender for more funds to prevent foreign reserves from dwindling further.
Ahsan H. Mansur will lead Bangladesh Bank, according to a statement from the finance ministry Tuesday night. Mansur, 72, has worked with the IMF for almost three decades, including serving as a senior representative to Pakistan. He replaces Abdur Rouf Talukder, who was forced to resign by protesters after former prime minister Sheikh Hasina fled the country.
Bangladesh is in a precarious position with its falling foreign exchange reserves. It means that the negotiations between the interim government and creditors and the IMF for more money beyond a $4.7 billion loan program will take a renewed urgency.
Reserves have dropped more than a billion dollars to $20.5 billion in end-July during the unrest and curfews that shuttered much of the economy. Inflation is also a concern for the South Asian country.
“Food inflation is very volatile,” Mansur told Bloomberg News ahead of his appointment. “My main goal will be to target non-food inflation.”
Mansur, who co-founded a think-tank in Dhaka, is a known critic of the central bank under Hasina’s regime. He has called for reforms in the financial sector to reduce loan defaults and said the South Asian country needs to have tax changes and flexible exchange rates to support the economy.
His predecessor Talukder did introduce greater flexibility for market interest rates and currency management. However, he was often criticized for failing to address governance issues in the banking sector.
Mansur will need to help Bangladesh meet conditions from the IMF to disburse funds from the existing loan program. So far, some $2.2 billion has been released to the country.
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