Abdur Rauf Talukdar got a ‘D’ grade as Bank Governor
Bangladesh Bank Governor Abdur Rauf Talukder has received a ‘D’ grade as a governor in the ranking of Global Finance magazine, based in the USA. Neighboring India’s Central Bank Governor Shaktikanta Das has got an A+ grade for achieving success on all indicators, including inflation control. Governor Nandalal Weerasinghe, who led Sri Lanka out of bankruptcy and hyperinflation, got an A- (A minus) grade.
Since 1994, Global Finance Magazine has been grading the governors of different countries of the world. ‘Central Banker Report Card’ is regularly published as an annual publication of the periodical. The latest report for 2023 is published based on the assessments of the central bank governors of 101 key countries. The report rates central bank governors across countries in five categories: A, B, C, D, and F. Among these, A, B, C, and D categories are further divided into three sub-categories on the basis of performance evaluation. As such, the governors of this class are rated in A+ (A plus), A(A), and A- (A minus) subcategories. And if a country’s central bank is considered ineffective and ultimately failing, its governor is ranked under the F grade.
It shows that the two governors who got the best or ‘A plus’ grade among the governors in Asia are neighboring India’s Reserve Bank of India (RBI) Governor Shaktikanta Das and Vietnam’s Central Bank Governor Nguyen Thi Hong. In South Asia, Central Bank of Sri Lanka Governor Nandalal Weerasinghe received an ‘A minus’ grade. And Nepal’s central bank governor Mahaprasad Adhikari, has got ‘B minus’ grade. Governor Jamil Ahmad of the Central Bank of Pakistan, which is in dire straits with inflation, has received a ‘C minus’.
In an analysis by Global Finance magazine, factors such as tight inflation control, protection of the local currency exchange rate and consolidating foreign exchange reserves emerged as criteria for evaluating governors. Bangladesh has deteriorated in these indicators in the last one year.
However, Global Finance Magazine sees the weakness of the economic structure and the government’s control over the central bank as the major weakness of Bangladesh Bank. Regarding Bangladesh, the report said, Bangladesh’s GDP growth rate in the post-Covid period was 5.6 percent. Again, the inflation rate exceeded the Bangladesh Bank’s target of 5 percent, but this additional rate was limited to 6.6 percentage points. The exchange rate was also stable. But by the middle of 2022, the rupee depreciated by 9.5 percent. Importers of goods continue to suffer due to the dollar crisis. Fuel and food prices have skyrocketed due to the war in Ukraine. Inflation also became rampant. As the central bank’s foreign exchange dwindles, assistance has been sought from the International Monetary Fund (IMF). But due to the structural weakness of Bangladesh economy and 60 percent control of the central bank by the government, Bangladesh falls into a fragile position in the face of external shocks like inflation.
Central Bank of Thailand Governor Sethaput Suthiwartanarueput got a ‘B plus’ among Asian emerging economies. Bank of Indonesia Governor Perry Warji also received an ‘A minus’. South Korea’s central bank governor Ri Chang-yong has been given an ‘A minus’ grade, Singapore’s Ravi Menon has been given a ‘B minus’ and Taiwan’s Yang Chin-long has been given an ‘A’ grade. This year’s report did not evaluate the performance of central bank governor’s in China, Japan, Malaysia, the Philippines and Myanmar among the major economies of the continent. The magazine refrained from grading the governors of these countries as they joined the ranks.
According to the information of the ‘Central Banker Report Card’ report published by Global Finance Magazine in the past years, from May 1, 2009 to March 15, 2016, the governor of Bangladesh Bank was Dr. Atiur Rahman. Atiur Rahman’s grade as governor was ‘C’ for these three years from 2012 to 2014. In 2015, he was promoted to ‘B minus’ grade for the first time. His performance was not evaluated that year as he resigned on March 15, 2016.
After the resignation of Atiur Rahman, Fazle Kabir took over as the Governor of Bangladesh Bank on March 20, 2016. He served as Governor till 3 July 2022. During this time he was given various grades by Global Finance Magazine. Fazal Kabir’s grade in 2017 was ‘B’. Then in 2018 and 2019 he was downgraded to ‘D’ grade category. However, the magazine gave Fazle Kabir ‘C’ grade for 2020 and 2021.
When Fazle Kabir retired, the government appointed the then Finance Secretary Abdur Rauf Talukdar as the twelfth governor of Bangladesh Bank. He took office as the governor on 12 July 2022. Because of this, no evaluation came about him in the ‘Central Banker Report Card’ of 2022. The magazine’s report card this year is the first time an assessment of him has been published.
No response was received from Bangladesh Bank despite trying to get a statement on this matter. Spokesperson of the Central Bank. Attempts were made to contact Majbaul Haque through various channels but he did not respond.
When asked about the matter, the former governor of Bangladesh Bank. Mohammad Farasuddin said, ‘I will not comment on this. But I think there are solutions to the crises that are going on in the economy. Bangladesh Bank may also be aware of the solution. Perhaps the problems are not being solved because of the government’s obstruction.’
The country’s inflation rate has been increasing steadily for two years. In July last year, the country’s inflation rate was 7.48 percent. In August of this year, the rate of inflation reached 9.92 percent.
Even though the price inflation in Bangladesh is at an extreme level, neighboring India continues to show success in this regard in the face of global adversity. Central Bank of India chief Shaktikanta Das has been given an A+ grade as governor in a ranking by Global Finance magazine. India’s economic growth rate stood at 9.1 percent in the fiscal year 2021-22 (April-March) after overcoming the shock of Covid. That was close to an all-time high. Along with maintaining this trend of growth, the country has also been able to control the rate of inflation, the major evaluation index of the economy. In January of the current calendar year, the country’s Consumer Price Index (CPI) stood at 6.5 percent. India has managed to bring it down to 4.25 percent within May. In order to control inflation, RBI increased only the repo rate by 6 points during this period. Shaktikanta Dash deserves a lot of credit for this RBI performance. Although the CPI rose to 7.4 percent in July, experts are mainly blaming the increase in the price of food products due to the decrease in production due to heavy rains.
The Shaktikanta Das-led RBI has announced that inflation above 6 percent will be considered above the tolerable level. RBI has decided to keep headline inflation in India between 2 and 6 percent in 2023. However, most attention will be paid to fixing it in the middle of this target range, i.e. close to 4 percent, said the parent organization of the Indian financial and currency market.
Bank Governor Nandalal Weerasinghe’s Remarkable Turnaround in Sri Lanka’s Economy
Sri Lanka has emerged from bankruptcy and inflation unprecedented in history. Last month also the country brought down the rate of inflation to 2.1 percent. The price of food products, the major catalyst of inflation, is now falling in the country. Central Bank of Sri Lanka (CBSL) Governor Nandalal Weerasinghe is credited with turning Sri Lanka around. However, after taking charge last year, he had to deal with the internal political crisis for a long time. He has been given a minus as a governor in the ranking of Global Finance Magazine.
The media’s comment on this is that Nandalal Weerasinghe left the Central Bank of Sri Lanka in 2020 after displeasure with the Rajapakse family. He returned to the central bank in April 2022 at the time of crisis in the country. Promoted as Governor. After the political situation became favorable, he started taking major steps to control inflation. Within two months, he raised Sri Lanka’s interest rate by 700 basis points. The bailout of 3 billion dollars released by the IMF last March played a role in filling the wounds of the economy. Last May the inflation rate in the country was 25 percent. The Central Bank of Sri Lanka was able to bring it down to 6.3 percent in July within two months.
The country’s foreign exchange reserves are also very fragile. At the end of June last year, the country’s reserves were (according to Bangladesh Bank’s own accounting system) 4 thousand 182 crores or 41.82 billion dollars. According to this accounting system, the reserve has fallen to 27.33 billion dollars on September 20 of this year. However, international standards (BPM6) are now being followed for the publication of reserve statistics based on IMF conditions. According to international standards, the country’s reserves are now only 21.45 billion dollars. However, Bangladesh Bank officials said on condition of anonymity that the net reserve is at least $2 billion less than that.
On June 30, 2022, the exchange rate in interbank transactions was 93 taka 45 paisa per dollar in the country. And in yesterday’s market it was 110 taka. According to this, from that time till now the depreciation of money has been 17.71 percent. There is now a severe crisis in the country’s dollar market. Bangladesh Bank is also constantly forced to sell dollars in the market from the reserves. No initiative by the central bank to increase the supply of dollars has been of much use. Remittance flows are also on the decline. In the first two months (July-August) of the current financial year, the remittance flow has decreased by 13.56 percent. The remittance situation worsened in September.